<p>New Delhi: The Lok Sabha on Tuesday passed a Bill that seeks to raise the foreign direct investment (FDI) cap in the insurance sector to 100% from the current 74% and improve ease of doing business for companies.</p><p>The Bill named the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill, 2025 seeks to amend the Insurance Act, 1938, the Life Insurance Corporation Act, 1956 and the Insurance Regulatory and Development Authority Act, 1999.</p><p>Replying to debate in the lower house of parliament, Union Finance Minister Nirmala Sitharaman said opening the sector for higher competition would help attract foreign investment and technology that would benefit customers.</p><p>“Once competition comes into the market, rates automatically reduce…more the competition better the rates,” Sitharaman said underlining the benefits of allowing higher foreign investments in the sector.</p><p>The Finance Minister claimed that the proposed amendments would further strengthen the public sector insurance companies. “By listing of LIC, we have made it transparent for the citizens,” she said.</p><p>Life Insurance Corporation (LIC) board is set to get greater autonomy in deciding business expansions. Following the amendments in the Act, LIC would not be required to get government’s permission for opening of branches or zonal offices.</p><p>Sitharaman said the amended regulations would boost insurance penetration in the country and help achieve the “Insurance for all by 2047” target.</p><p>“The government has recently come up with several flagship programmes, like PM Jeevan Jyothi Yojana, PM Suraksha Bima Yojana, PM Jan Aarogya Yojana, and Krishi Bima Yojana aimed for the inclusion of the poorest sections of the society who can't afford insurance," the finance minister said.</p><p>For better clarity to customers, all the insurance companies and the intermediaries would be required to put the word "insurance" in their name. “We are also treating both intermediaries and insurance companies with a lot more standardised approach so that whenever they do anything, they will have to have a stakeholder consultation before they bring in any policy," Sitharaman said.</p>.'Show me the money ma'am': Omar Abdullah quips after Nirmala Sitharaman praises his 'focused' approach to restore J-K's economy.<p>India opened its insurance sector for foreign competition in 2001 by allowing 26% FDI. The FDI limit in the insurance sector was increased to 49% in 2015 and to 74% in 2021. The FDI limit for insurance intermediaries was raised to 100% in 2019 to enable them to provide better advisory services to citizens.</p><p>Meanwhile, opposition parties criticised the bill terming it an attempt to “corporatisation” of the insurance sector.</p><p>Analysts said changes in law would help attract long‑term capital and international know‑how in the sector.</p><p>“For Indian and foreign insurers, this is a significant change from the point of ownership and governance,” said Stella Joseph, Partner, Economic Laws Practice.</p> <p>Insurance Brokers Association of India (IBAI) President Narendra Bharindwal said the proposed reforms are “decisive step towards building a transparent, resilient, and globally competitive insurance ecosystem.”</p> <p>“Higher FDI can also support stronger financial discipline. Increased scrutiny, better price discovery, and regular health checks will help control costs and reduce inefficiencies across the value chain,” said Peuli Das, Partner-Actuarial Services, BDO India.</p> <p>“With rising competition and improved insurance penetration, the industry is poised for healthy and sustainable growth,” Das added.</p>
<p>New Delhi: The Lok Sabha on Tuesday passed a Bill that seeks to raise the foreign direct investment (FDI) cap in the insurance sector to 100% from the current 74% and improve ease of doing business for companies.</p><p>The Bill named the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill, 2025 seeks to amend the Insurance Act, 1938, the Life Insurance Corporation Act, 1956 and the Insurance Regulatory and Development Authority Act, 1999.</p><p>Replying to debate in the lower house of parliament, Union Finance Minister Nirmala Sitharaman said opening the sector for higher competition would help attract foreign investment and technology that would benefit customers.</p><p>“Once competition comes into the market, rates automatically reduce…more the competition better the rates,” Sitharaman said underlining the benefits of allowing higher foreign investments in the sector.</p><p>The Finance Minister claimed that the proposed amendments would further strengthen the public sector insurance companies. “By listing of LIC, we have made it transparent for the citizens,” she said.</p><p>Life Insurance Corporation (LIC) board is set to get greater autonomy in deciding business expansions. Following the amendments in the Act, LIC would not be required to get government’s permission for opening of branches or zonal offices.</p><p>Sitharaman said the amended regulations would boost insurance penetration in the country and help achieve the “Insurance for all by 2047” target.</p><p>“The government has recently come up with several flagship programmes, like PM Jeevan Jyothi Yojana, PM Suraksha Bima Yojana, PM Jan Aarogya Yojana, and Krishi Bima Yojana aimed for the inclusion of the poorest sections of the society who can't afford insurance," the finance minister said.</p><p>For better clarity to customers, all the insurance companies and the intermediaries would be required to put the word "insurance" in their name. “We are also treating both intermediaries and insurance companies with a lot more standardised approach so that whenever they do anything, they will have to have a stakeholder consultation before they bring in any policy," Sitharaman said.</p>.'Show me the money ma'am': Omar Abdullah quips after Nirmala Sitharaman praises his 'focused' approach to restore J-K's economy.<p>India opened its insurance sector for foreign competition in 2001 by allowing 26% FDI. The FDI limit in the insurance sector was increased to 49% in 2015 and to 74% in 2021. The FDI limit for insurance intermediaries was raised to 100% in 2019 to enable them to provide better advisory services to citizens.</p><p>Meanwhile, opposition parties criticised the bill terming it an attempt to “corporatisation” of the insurance sector.</p><p>Analysts said changes in law would help attract long‑term capital and international know‑how in the sector.</p><p>“For Indian and foreign insurers, this is a significant change from the point of ownership and governance,” said Stella Joseph, Partner, Economic Laws Practice.</p> <p>Insurance Brokers Association of India (IBAI) President Narendra Bharindwal said the proposed reforms are “decisive step towards building a transparent, resilient, and globally competitive insurance ecosystem.”</p> <p>“Higher FDI can also support stronger financial discipline. Increased scrutiny, better price discovery, and regular health checks will help control costs and reduce inefficiencies across the value chain,” said Peuli Das, Partner-Actuarial Services, BDO India.</p> <p>“With rising competition and improved insurance penetration, the industry is poised for healthy and sustainable growth,” Das added.</p>