A AKHTER / NEW DELHI
The Parliament of India today passed the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill 2025, with the Rajya Sabha approving it. Lok Sabha had passed the Bill yesterday. The Bill seeks to amend the Insurance Act 1938, the Life Insurance Corporation Act, 1956 and the Insurance Regulatory and Development Authority Act, 1999.
The Bill proposes to increase the Foreign Direct Investment limit in Indian Insurance companies from 74 per cent to 100 per cent of the paid-up equity capital. The Bill reduces the net-owned fund requirements for foreign entities engaged in the re-insurance business from 5,000 crore rupees to 1,000 crore rupees.
The Bill amends the definition of an insurance co-operative society to remove the requirement of minimum paid-up share capital of 100 crore rupees for life, general, and health insurance businesses.
The Bill is aimed at accelerating the growth and development of the insurance sector and ensuring better protection of policyholders. It also proposes to improve the ease of doing business for insurance companies, and to bring transparency in regulation-making and to improve regulatory oversight over the sector.
Replying to the debate on the Bill, Finance Minister Nirmala Sitharaman highlighted that since assuming office in 2014, Narendra Modi government has introduced significant reforms in the insurance sector. She stressed that the government has recognised that true national development requires broader insurance coverage for people, businesses, and agriculture.
The Finance Minister said the government is committed to the expansion of insurance in rural areas for the common man. She said several flagship insurance schemes have been launched since 2014, including Jeevan Jyoti Yojana and Krishi Bima Yojana.
Ms Sitharaman said the Regulator has mandated rural and social sector obligations, and these are across the board for all insurers. She added that they will have to cover a specified percentage of people from rural areas and the underprivileged sections. She further stated that these obligations are binding on all insurers and are being rigorously monitored by the Regulator.
Initiating the discussion, Shaktisinh Gohil of Congress took on the Government for bringing the Bill in a hurry. He said, Congress is never against progress, but it keeps people’s interests first. Opposing the Bill, Mr Gohil said, his party cannot stand by profiting for private companies.
BJP MP Arun Singh said the Bill envisages that every person should get insurance. He added that through this Bill, the efficiency and performance of insurance companies will increase.
Saket Gokhale of TMC said insurance must primarily be seen as a social security scheme where insurance companies carry a fiduciary responsibility to the policyholder. He claimed that the Bill only strengthens capital while it weakens accountability and leaves policyholders exposed.
Dr Kanimozhi NVN Somu of DMK criticised the Bill, saying it is yet another example of how economic legislation is being pushed without adequate consultation with the States and without regard to federal architecture.
Subhashish Khuntia of BJD, Sanjay Yadav of RJD, Dr M Thambidurai of AIADMK, Dr Ashok Kumar Mittal of AAP, Dr Bhagwat Karad of BJP, Mahua Maji of JMM, Haris Beeran of IUML, Dr John Brittas of CPI(M), and Bhubaneswar Kalita of BJP were among those who participated in the discussion.