Full foreign ownership and one-time licensing: what the Sabka Bima Sabki Raksha Bill changed

Background

Parliament has recast the insurance statute book through the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill, 2025, brought by the Ministry of Finance. One Bill amends three Acts at once: the oldest is the Insurance Act of 1938, and next comes the Life Insurance Corporation Act of 1956. The third is the Insurance Regulatory and Development Authority Act, 1999. Its headline change raises the foreign direct investment limit in an Indian insurance company from 74% to 100% of the paid-up equity capital. The net owned fund a foreign reinsurance branch must hold falls from Rs 5,000 crore to Rs 1,000 crore. The point at which an insurer must get the regulator's prior approval to register a share transfer moves from 1% to 5% of its paid-up share capital. Intermediaries get one-time licensing, and a licence can be suspended instead of being cancelled outright. A Policyholders' Education and Protection Fund is to be set up, policyholder data must be handled in line with the data protection law, and the regulator gains the power to disgorge wrongful gains from insurers and intermediaries. Rule-making by the regulator must now follow a standard operating procedure and be consultative.