The Lok Sabha on Tuesday passed the Insurance Amendment Bill 2025, a landmark piece of legislation that opens the insurance sector to up to 100% foreign direct investment (FDI). The move is aimed at expanding insurance coverage, attracting global capital, and strengthening India’s insurance ecosystem.
Before the House voted on the bill, Finance Minister Nirmala Sitharaman said the proposed reforms would improve access to insurance products, encourage the entry of more players into the market, and create a more robust and transparent regulatory framework.
“The bill aims at bringing transparency, easing compliance mandates, and increasing FDI,” Sitharaman said while addressing the Lower House.
The legislation, formally titled ‘The Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill, 2025’, seeks to amend three key laws governing the sector — the Insurance Act, 1938; the Life Insurance Corporation Act, 1956; and the Insurance Regulatory and Development Authority Act, 1999.
According to the government, allowing 100% FDI is expected to infuse much-needed capital into the insurance industry, support innovation, enhance customer choice, and help achieve the goal of wider insurance penetration across the country.
The reforms are also designed to simplify regulatory compliance for insurers while ensuring stronger oversight by the regulator, thereby balancing ease of doing business with policyholder protection.