Lok Sabha passes bill to raise FDI in insurance sector to 100 pc, Sitharaman highlights thrust on strengthening regulatory oversight
New Delhi, December 16
The Lok Sabha on Tuesday passed a bill that aims to strengthen policyholder protection, accelerate the growth of the insurance sector and raise the limit of FDI in the insurance sector from 74 per cent to 100 per cent.
'The Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill, 2025' seeks to amend key legislations, including the Insurance Act, 1938, the Life Insurance Corporation Act, 1956, and the Insurance Regulatory and Development Authority of India (IRDAI) Act, 1999.
Replying to a debate on the Bill in the Lok Sabha, Finance Minister Sitharaman said the government wants the regulators to be more robust. Opposition parties strongly opposed the bill.
She said the proposed amendments are aligned with the government's long-term vision of achieving 'Insurance for All by 2047' and improving ease of doing business in the sector.
"We want the regulator also to be more robust and taken measures around this in the amendment Bill ranging from better regulatory oversight, ease of compliance, insurance intermediaries to provide uninterrupted services, and so on," Sitharaman said.
"We are also treating both intermediaries and insurance companies with a lot more standardized approach so that whenever they do anything, they will have to have a stakeholder consultation before they bring in any policy," she added.
The Finance Minister said that under the new arrangement, all the insurance companies and the intermediaries need to put the word "insurance" in their name for a better clarity of the customers.
"We are introducing suspension of intermediary license instead of direct cancellation because that will provide time for compliance and allow the intermediary an opportunity to strategize, streamline operations, bring in greater transparency."
The Bill proposes to raise the Foreign Direct Investment (FDI) limit in Indian insurance companies from the existing 74 per cent to 100 per cent.
She said the move is intended to attract stable, long-term foreign capital, facilitate technology transfer, and enhance insurance penetration and social security coverage across the country.
— ANI
Reader Comments
While attracting foreign investment is good, I have concerns. What safeguards are there to ensure Indian jobs and management control aren't eroded? The bill talks about oversight, but will IRDAI have the teeth to regulate these giant foreign entities effectively? Hope the 'stakeholder consultation' promise is real and not just a formality.
Finally! This should increase competition and lead to better products and maybe lower premiums for us common people. More players in the market is always good for consumers. The suspension of license instead of cancellation is a sensible, reformative approach. Ease of doing business should benefit customers too.
The emphasis on putting 'insurance' in company names for clarity is a small but very important consumer protection measure. So many people get confused by financial products. Strengthening the regulator is the key to making this work. Hope this leads to more innovative and affordable health & term plans for the middle class.
The opposition's concerns shouldn't be dismissed outright. We've seen in other sectors how foreign dominance can squeeze out local players. LIC is our pride. The amendment to its Act must ensure its unique position and social role are protected. FDI is a tool, not an end goal. Jai Hind.
Insurance penetration in rural India is still so low. If this foreign capital leads to companies expanding their reach to villages and offering tailored products for farmers and small businesses, then it's a win. But the bill must mandate certain social security goals, not just profits. 🇮🇳
We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.