Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill, 2025
Why in news?
The Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill, 2025 amends the Insurance Act, 1938, LIC Act, 1956, and IRDAI Act, 1999 to modernize the sector, boost coverage, and achieve "Insurance for All by 2047." Approved by the Union Cabinet on December 12, 2025, it is set for introduction in Parliament's Winter Session.​
Key Provisions
- The bill raises FDI limits from 74% to 100% to attract foreign capital, technology, and competition.
- It lowers Net Owned Funds for foreign reinsurers from ₹5,000 crore to ₹1,000 crore, enhancing reinsurance capacity beyond GIC Re.
- Insurance Regulatory and Development Authority Act (IRDAI) gains disgorgement powers for wrongful gains, one-time intermediary registration, and a higher 5% equity transfer approval threshold.​
Policyholder Protections
- A Policyholders' Education and Protection Fund will use penalties, grants, and donations to educate and safeguard consumers.
- Penalties for non-compliance rise to ₹10 crore, with new rules for unregistered intermediaries. Digital infrastructure secures policyholder data.​
LIC Reforms
- LIC gains autonomy to open zonal offices without government approval and align overseas operations with host laws.​
The bill excludes composite licenses, preventing insurers from offering both life and non-life products. It retains high capital norms (₹100 crore for insurers), blocking niche entrants, and drops captive insurers or multi-product distribution.​
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