Sabka Bima Sabki Raksha Bill, 2025 Approved by Cabinet

The Union Cabinet has approved the Sabka Bima Sabki Raksha (Insurance Laws Amendment) Bill, 2025, marking a significant step toward modernising India’s insurance framework and expanding coverage across segments. The Bill seeks to align insurance laws with evolving market realities while strengthening penetration and consumer choice.

A key feature of the Bill is the proposal to allow 100% foreign direct investment (FDI) in the insurance sector, up from the current 74%. The move is expected to attract long-term global capital, deepen the insurance market, and bring advanced risk management practices and technology into the sector. The Bill also proposes reduced entry barriers for foreign reinsurers, which could enhance capacity, competition, and pricing efficiency—particularly for large and complex risks.

Another important reform is greater operational autonomy for the Life Insurance Corporation of India (LIC). Enhanced flexibility is aimed at enabling LIC to compete more effectively in a liberalised market, innovate products, and improve governance while continuing to fulfil its public mandate.

The reforms are positioned to advance financial inclusion by widening access to insurance products, especially in underpenetrated regions and among vulnerable populations. Increased competition is expected to improve product diversity, service quality, and affordability for consumers.

Overall, the Bill represents a major structural reform designed to deepen India’s insurance ecosystem, attract global investment, and support long-term economic resilience. If implemented effectively, it could significantly raise insurance penetration and strengthen India’s financial sector architecture.