New Delhi: Parliament Wednesday passed a bill to raise FDI in the insurance sector to 100 per cent from the current 74 per cent, which is expected to increase insurance penetration, lower premiums, and boost job creation.
The Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill, 2025, was cleared by the Rajya Sabha with a voice vote, a day after it was passed by the Lok Sabha.
The House also rejected several amendments made by the Opposition to the bill, including the one to send the legislation to a parliamentary panel for further scrutiny.
Replying to a debate on the bill, Finance Minister Nirmala Sitharaman said the amendments would allow foreign companies to bring in more capital in the insurance sector.
Sitharaman informed the House that the opening of the sector has helped in increasing penetration of insurance in the country, and there is scope for more.
She said the increase in the FDI limit to 100 per cent will pave the way for more foreign companies to enter India, as in many cases, they do not find joint venture partners due to various reasons.
The minister also exuded confidence that with more companies, the competition will increase, and premiums should drop.
Allaying concerns of some members on the job front, Sitharaman said that, on the contrary, there will be more employment opportunities.
She cited data in support of her assertion, saying jobs in the sector have nearly tripled since the FDI limit was raised from 26 per cent to the current 74 per cent.
The minister also refuted the Opposition’s allegations that the government was in haste to pass the bill, saying consultations took place on it for nearly two years.
The Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill, 2025, would lead to amendments in the Insurance Act, 1938, the Life Insurance Corporation Act, 1956, and the Insurance Regulatory and Development Authority Act, 1999.
It also paves the way for the merger of a non-insurance company with an insurance firm.
The bill also aims to accelerate the growth and development of the insurance sector and ensure better protection of policyholders, as per the statement of objects and reasons.
The bill provides for the establishment of the Policyholders’ Education and Protection Fund to protect policyholders’ interests.
