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RAS question

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?

Correct answer: (D) 1, 2 and 3.

The Sabka Bima Sabki Raksha legislation makes all three statements correct: it lowers the foreign reinsurer net-owned fund requirement to Rs 1,000 crore, gives IRDAI disgorgement powers, and permits foreign direct investment up to 100% of paid-up equity capital.

  1. (A)

    1 and 2 only

  2. (B)

    3 only

  3. (C)

    1 and 3 only

  4. (D)

    1, 2 and 3

Explanation

All three statements are correct. The official text allows aggregate foreign investor holdings in an Indian insurance company to extend up to 100% of paid-up equity capital, so statement 3 is right. It also replaces the registration condition for the relevant foreign reinsurance branch category with a net-owned fund requirement of not less than Rs 1,000 crore, reducing the requirement from Rs 5,000 crore to Rs 1,000 crore in statement 1. Statement 2 is correct because the Bill grants disgorgement powers to IRDAI, and the Act's penalty framework expressly considers disproportionate gain or unfair advantage while determining penalties.

Why the other options are wrong

  • (A) Option A leaves out statement 3, although the legislation permits foreign direct investment up to 100% of paid-up equity capital.
  • (B) Option B leaves out statements 1 and 2, even though the net-owned fund reduction and IRDAI disgorgement power are both part of the tested reform package.
  • (C) Option C leaves out statement 2, despite the Bill giving IRDAI disgorgement powers linked to wrongful or unfair gains.

Concept

This tests financial-sector reform in Indian Economy: insurance FDI, reinsurance entry norms, and regulator enforcement powers. RAS often frames such recent Union legislation as statement-combination questions because small legal changes alter both market access and supervision.

Source

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