New Delhi: A bill seeking to raise Foreign Direct Investment (FDI) in India’s insurance sector to 100 percent was introduced in the Lok Sabha on Tuesday, sparking protests from opposition parties. The bill, titled Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Act, 2025, aims to amend the Insurance Act, 1938, LIC Act, 1956, and IRDAI Act, 1999.
Union Finance Minister Nirmala Sitharaman said the government has always focused on providing insurance for common people, including marginal sections of society, even during the Covid pandemic. She stated she was ready to address all objections raised by opposition members during the debate.
Opposition raises concerns
Several opposition members expressed concerns about the bill. RSP member N K Premachandran said the bill’s name did not match its contents and opposed 100 percent FDI in insurance. DMK’s T Sumathy and TMC’s Saugata Roy also strongly opposed the move, arguing that it could be a backward step for the sector.
Key proposals in the bill
The draft bill raises the FDI limit in insurance from 74 percent to 100 percent, while mandating that at least one top official-Chairman, Managing Director, or CEO-must be an Indian citizen. The bill also allows mergers between insurance and non-insurance companies, aiming to strengthen the sector.
It seeks to promote the growth and development of insurance, ensure better policyholder protection, and enhance regulatory oversight. A Policyholders’ Education and Protection Fund will be established to safeguard policyholders’ interests. The amendments also aim to improve ease of doing business, bring transparency in regulation-making, and facilitate the entry of additional players into the insurance market.
Changes in term limits and LIC operations
The bill proposes a five-year term for the Chairperson and whole-time members or until age 65, whichever is earlier. Currently, the age limit for whole-time members is 62, and 65 for the Chairperson. LIC’s board will also be empowered to take operational decisions, such as branch expansion and recruitment.
According to the government, the move is part of new-generation financial sector reforms announced in this year’s Budget. The insurance sector has so far attracted percent82,000 crore through FDI, and the amendment is expected to promote policyholder interests, financial security, economic growth, and employment generation.