The Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill, 2025¹ passed by the Parliament² now allows up to 100% FDI in insurance companies and would deepen Insurance coverage.³

What Does It Mean

The Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill, 2025 amends three key legislations governing India’s insurance sector—the Insurance Act, 1938, the Life Insurance Corporation Act, 1956, and the Insurance Regulatory and Development Authority Act, 1999. The Bill not only raises the foreign direct investment (FDI) cap but also strengthens policyholder protection while improving ease of doing business for insurers.

The legislation modernises the statutory framework governing insurance in India and represents the most significant reform of the sector in decades.^4. The higher FDI limit is expected to expand insurance coverage, enhance competition, reduce premiums, and generate further employment.⁵ According to the government, these changes will attract greater investment and make insurance more affordable and accessible across the country.⁶

The Bill comes a few months after GST relief on individual and health insurance premiums and is expected to further improve the affordability of insurance for consumers. It also enables the merger of a non-insurance company with an insurance firm, signalling greater flexibility in corporate structuring.⁷

Further, the law substantially strengthens the powers of the Insurance Regulatory and Development Authority of India (IRDAI), granting it broader authority to investigate insurers and intermediaries, including search-and-seizure powers and the ability to issue binding directions such as the disgorgement of unlawful gains.⁸

With Parliament clearing the Bill, the framing of supporting rules and amendments to IRDAI regulations will now be critical in shaping how the law balances policyholder interests with ease of doing business, while also determining its impact on domestic insurers amid increased participation by foreign players.