Published: 16 December 2025PIBEconomy
Parliament Passes Sabka Bima Sabki Raksha Bill: 100% FDI in Insurance Approved
Parliament passed the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill, 2025 on December 17, with Lok Sabha passing it on December 16 and Rajya Sabha on December 17. The bill increases the FDI limit in Indian insurance companies from 74% to 100% of paid-up equity capital.
The bill amends three Acts: The Insurance Act 1938, The LIC Act 1956, and The IRDAI Act 1999. Key changes include: reduction of net-owned fund requirements for foreign reinsurers from ₹5,000 crore to ₹1,000 crore; IRDAI gets disgorgement powers; simplified intermediary registration; raised equity transfer thresholds; and mandatory transparent rule-making and penalty frameworks. The reform aims to attract global insurance capital and increase coverage in India, where insurance penetration remains below 4%.
0Mains angle
Q: Critically examine the provisions of the Sabka Bima Sabki Raksha Bill, 2025 raising insurance FDI to 100 percent and its implications for penetration.
Answer (50 words):
Parliament passed the Sabka Bima Sabki Raksha Bill on December 17, 2025, raising insurance foreign direct investment from 74 to 100 percent of paid-up equity. Amending the Insurance Act 1938, LIC Act 1956 and IRDAI Act 1999, it reduces foreign reinsurer net-owned funds from 5,000 to 1,000 crore rupees, targeting sub-four-percent penetration.
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Practice MCQ from this story
SolveTap an option below. Correct or incorrect feedback appears instantly.
Linked questionHard
With reference to the Sabka Bima Sabki Raksha Bill passed by Parliament in December 2025, consider the following:
1. The Bill reduces net-owned fund requirements for foreign reinsurers from ₹5,000 crore to ₹1,000 crore.
2. IRDAI gets disgorgement powers under this Bill.
3. The FDI limit is raised to 100% of paid-up equity capital.
Which of the above is/are correct?
Explanation · Correct answer DAll three statements are correct. The Bill reduces reinsurer net-owned fund requirements from ₹5,000 crore to ₹1,000 crore, grants IRDAI disgorgement powers, and raises FDI limit to 100% of paid-up equity capital.
Frequently asked questions
What did Parliament pass on December 17 for insurance laws?
Parliament passed the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill, 2025 on December 17, after Lok Sabha passed it on December 16 and Rajya Sabha on December 17.
How does the bill change the FDI limit for Indian insurance companies?
The bill increases the FDI limit in Indian insurance companies from 74% to 100% of paid-up equity capital.
Which Acts are amended by the Sabka Bima Sabki Raksha bill?
The bill amends the Insurance Act 1938, the LIC Act 1956, and the IRDAI Act 1999.
What are the key regulatory and sectoral changes in the insurance reform?
It reduces net-owned fund requirements for foreign reinsurers from ₹5,000 crore to ₹1,000 crore, gives IRDAI disgorgement powers, and simplifies intermediary registration. The reform aims to attract global insurance capital and increase coverage in India, where insurance penetration remains below 4%.
