New Delhi: The Centre is set to introduce a Bill in Parliament this week to allow 100 per cent foreign direct investment (FDI) in the insurance sector, in a move aimed at expanding insurance coverage across the country by 2047.
The proposed legislation, titled the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Act, 2025, has already received approval from the Union Cabinet, clearing the way for its tabling.
According to the Bill circulated to Members of Parliament, the amendments will apply to three key laws – the Insurance Act, 1938; the Life Insurance Corporation Act, 1956; and the Insurance Regulatory and Development Authority Act, 1999. The proposed changes seek to raise the FDI cap from the current 74 per cent to 100 per cent, opening the sector fully to foreign investment.
However, the Bill retains a key safeguard by mandating that at least one senior official – the chairperson, managing director or chief executive officer – of an insurance company must be an Indian citizen.
The proposed law also allows the merger of a non-insurance company with an insurance company, a provision expected to facilitate consolidation and capital infusion in the sector. In addition, the Bill seeks to strengthen policyholder protection.
The legislation also revises the tenure of the Chairperson and whole-time members of the regulator, fixing it at five years or up to the age of 65 years, whichever comes earlier.
