Parliament passes Sabka Bima Sabki Raksha Bill allowing 100% FDI in insurance
Parliament passed the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill, 2025 on 17 December 2025, allowing up to 100% Foreign Direct Investment in insurance companies.
Summary
Parliament passed the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill, 2025 on 17 December 2025, allowing up to 100% Foreign Direct Investment in Indian insurance companies. The Sabka Bima Sabki Raksha Bill amends the Insurance Act, 1938, the Life Insurance Corporation Act, 1956 and the Insurance Regulatory and Development Authority Act, 1999. The Bill cuts the Net Owned Fund requirement for foreign reinsurance branches from ₹5,000 crore to ₹1,000 crore, raises the limit for prior approval of share transfers from 1% to 5%, and lets LIC open zonal offices on its own. A Policyholders' Education and Protection Fund will be set up, and IRDAI gets the power to disgorge wrongful gains from insurers and intermediaries.
Key facts
- Passed by Parliament
- 17 December 2025
- FDI
- Up to 100% in insurance companies
- Acts amended
- Insurance Act 1938; LIC Act 1956; IRDA Act 1999
- Foreign reinsurers
- Net Owned Fund cut from ₹5,000 crore to ₹1,000 crore
- Share transfer approval
- Threshold raised from 1% to 5%
- New fund
- Policyholders' Education and Protection Fund
Practice MCQs 4 questions
The Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill, 2025, passed by Parliament on 17 December 2025, allows FDI in insurance companies up to what limit?
Show answer
Correct answer: C — 100%
PIB 2206011: a key feature of the Bill is to allow up to 100% Foreign Direct Investment in insurance companies.
Under the Sabka Bima Sabki Raksha Bill, 2025, the Net Owned Fund requirement for foreign reinsurance branches has been reduced from ₹5,000 crore to:
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Correct answer: B — ₹1,000 crore
PIB 2206011: the Net Owned Fund requirement of foreign reinsurance branches has been reduced from ₹5,000 crore to ₹1,000 crore.
Which of the following Acts is NOT amended by the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill, 2025?
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Correct answer: D — General Insurance Business (Nationalisation) Act, 1972
PIB 2206011: the Bill amends three Acts: the Insurance Act, 1938, the LIC Act, 1956 and the IRDA Act, 1999. The General Insurance Business (Nationalisation) Act is not among them.
Consider the following statements about the Sabka Bima Sabki Raksha Bill, 2025: 1. The limit for seeking prior regulatory approval for transfer of share capital has been raised from 1% to 5%. 2. A Policyholders' Education and Protection Fund will be set up. 3. IRDAI is given the power to disgorge wrongful gains from insurers and intermediaries. Which of the statements given above is/are correct?
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Correct answer: D — 1, 2 and 3
PIB 2206011: the share-transfer approval limit rises from 1% to 5%, a Policyholders' Education and Protection Fund will be set up, and IRDAI gets the power to disgorge wrongful gains. All three are correct.