Despite being one of the world’s fastest-growing economies, insurance penetration in India remains low, leaving ample scope to expand coverage and strengthen financial inclusion. The Government’s vision of “Insurance for All by 2047” underpins these reforms.
Aligning with this vision, the Lok Sabha has recently passed the Sabka Bima Sabki Raksha- Amendment of Insurance Laws bill 2025. The bill seeks amendments to the Insurance Act 1938, the Life Insurance Act 1956, and the Insurance Regulatory and Development Authority Act 1999.
What is the Sabka Bima Sabki Raksha Amendment of Insurance Laws bill 2025?
The Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill, 2025, is a major insurance reform law passed by the Indian Parliament that aims to refine and strengthen the insurance sector.
Key Vision of New Bill Amendment
The aim of seeking this bill is to accelerate the growth and development of the insurance sector. Along with that, it ensures better protection of policyholders. Key amendments are as follows:
100% Foreign Direct Investment
The Lok Sabha’s passage of the Sabka Bima Sabki Raksha Bill, 2025, marks a major milestone in Indian insurance law. It has opened the door to full foreign investment, strengthening the regulator's power, and modernizing longstanding laws. The Bill is set to refine the country’s insurance landscape in the years ahead.
Stronger Regulatory Powers & Policyholder Safeguards
To strengthen consumer awareness and protection, the Bill provides for the creation of a Policyholders' Education and Protection Fund under the supervision of IRDAI. The fund will be used to protect policyholder interests and promote insurance education.
Scope of Insurance Intermediaries Expanded
The scope of insurance intermediaries also expanded, along with insurance brokers, consultants, and third-party administrators; it will also include managing general agents and insurance repositories, bringing more entities under regulatory oversight.
Greater Flexibility for LIC
The Life Insurance Corporation of India (LIC) will now enjoy more operational freedom, including the ability to open insurance branches and restructure overseas operations hassle-free.
Bottom Line
By combining growth-friendly reforms with stronger consumer protection, the bill sets the foundation for a more inclusive and resilient insurance ecosystem — one that truly lives up to its name: Sabka Bima, Sabki Raksha.
