Sabko Bima Sabko Raksha (Amendment of Insurance Laws) Bill, 2025
The Lok Sabha passed the Sabko Bima Sabko Raksha (Amendment of Insurance Laws) Bill, 2025, focusing on reforming India's insurance framework through amendments to key Acts.
Key Amendments and Provisions
- FDI Increase: Foreign Direct Investment (FDI) limit in Indian insurance companies raised from 74% to 100% to boost investment and technology transfer.
- Net Owned Funds: Requirement for foreign reinsurers lowered from Rs 5,000 crore to Rs 1,000 crore.
- Regulatory Powers: Enhanced powers for IRDAI, including authority to address wrongful gains by insurers or intermediaries.
- LIC Operational Freedom: LIC can establish new zonal offices without government approval, benefiting expansion and efficiency.
Government's Perspective
Union Finance Minister Nirmala Sitharaman emphasized benefits of increased competition for consumers, citing historical amendments reflecting India's progress:
- 1940s: Agents’ commission reduction.
- 1999: Introduction of foreign players with 26% FDI cap.
- 2014-15: Increase in insurers from 53 to 74; FDI in insurance intermediaries now 100%.
Insurance Penetration: Improved from 3.3% in 2014-15 to 3.75-8% currently. Insurance density is now USD 97, up from USD 55.
Opposition's Concerns
- Manickam Tagore (Congress): Criticized the retreat of state involvement in bearing societal risks.
- Utkarsh Verma (SP): Warned against foreign dominance in the insurance sector without Indian partners.
- Satabdi Roy (TMC): Noted that insurance penetration in India is below the global average of 7%.
- DM Kathir Anand (DMK): Argued the Bill could weaken LIC and risk citizen savings with foreign firms.
