Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill, 2025
IRDAI gains expanded enforcement powers through the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill, 2025, recently passed by the Lok Sabha. This legislation shifts the regulator toward a proactive enforcement model, targeting insurers and intermediaries like agents, brokers, and TPAs.​
About the bill
- The Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill, 2025 amends the Insurance Act, 1938, Life Insurance Corporation Act, 1956, and IRDAI Act, 1999 to modernize the sector, expand coverage, and strengthen oversight.
- Introduced in Lok Sabha on December 16, 2025 by Finance Minister Nirmala Sitharaman, it passed the Lok Sabha by December 15 amid discussions on insurance penetration growth.​
Key Objectives
- The Bill aims to boost insurance penetration toward "Insurance for All by 2047," ease compliance for companies, enhance policyholder data protection, and promote transparency in regulations.
- It supports flagship schemes like PM Jeevan Jyoti Bima Yojana and PM Suraksha Bima Yojana while addressing GST waivers on premiums.​
Major Provisions
- Permits 100% FDI in Indian insurance companies, up from prior limits, to attract global investment and accelerate sector growth.​
- Defines "class of insurance business" (life, general, health, re-insurance) and expands health insurance to cover accidents and travel.​
- Mandates insurance intermediary registration, tightens KYC/data rules, and requires electronic policies above thresholds.​
- Updates investment norms: life insurers invest 50% in government/approved securities; others 30%, with up to 15% in non-approved assets.​
- Raises penalties to ₹10 crore max, empowers IRDAI with search/seizure and disgorgement powers, and bans common directors across competing insurers.​
Implications
- Policyholders gain better protection, cheaper premiums via competition, and wider choices, though composite licenses and lower capital norms remain omitted.
- Insurers face stricter governance but benefit from simplified mergers and LIC autonomy.
- The Bill aligns with digital economy needs, excluding SEZs/IFSCs with modifications.​
IRDAI's New Enforcement Powers
- Insurance Regulatory and Development Authority of India (IRDAI) IRDAI gains authority for searches, seizures, and inspections ordered by the Chairperson when entities withhold documents, tamper records, or violate laws like illegal commissions.
- This aligns IRDAI's powers with SEBI's, targeting insurers and intermediaries such as agents, brokers, banks, NBFCs, web aggregators, TPAs, and surveyors.​
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