The Sabka Bima Sabki Raksha Act received Presidential assent and was formally notified in the Official Gazette on December 21, 2025, marking a historic milestone in India's insurance sector liberalisation. This legislation is among the most comprehensive reforms to India's insurance architecture since the IRDA Act of 1999.
A pivotal provision grants the Life Insurance Corporation of India (LIC) the autonomy to restructure its overseas operations without requiring prior government approval. This significantly enhances LIC's agility in global insurance markets and reduces bureaucratic bottlenecks that previously hampered its international expansion strategy.
The Act also empowers the Insurance Regulatory and Development Authority of India (IRDAI) with disgorgement powers — the authority to recover ill-gotten gains from insurance entities that violate regulatory norms. This is a significant regulatory upgrade that aligns India's insurance oversight with global best practices, including the IAIS Core Principles for insurance supervision.
In a move to deepen the reinsurance market, the Act reduces the Net Own Fund (NOF) requirement for foreign reinsurers from ₹5,000 crore to ₹1,000 crore. This reduction is expected to attract a larger pool of global reinsurers to operate in India, increasing competition and reducing reinsurance costs for domestic insurers.
Additionally, the Act removes the mandatory Joint Venture (JV) requirement for certain insurance operations, allowing foreign entities greater flexibility in structuring their India presence. This is aligned with the government's broader liberalisation of the FDI regime in insurance, which already permits 100% FDI in the sector.
Collectively, these reforms aim to deepen insurance penetration, improve regulatory rigour, and position India as an internationally competitive insurance hub.