Parliament has cleared the Sabka Bima Sabki Raksha Bill 2025, a major reform that is set to redefine India’s insurance landscape. The bill allows 100 percent foreign direct investment in the insurance sector, raising the previous cap of 74 percent, and introduces long awaited changes aimed at expanding coverage, strengthening policyholder protection and modernising decades old insurance laws.
What is the Sabka Bima Sabki Raksha Bill
The Sabka Bima Sabki Raksha Bill is an amendment to multiple insurance related laws, including the Insurance Act of 1938, the IRDAI Act of 1999 and the Life Insurance Corporation Act of 1956. The government says the objective is to make insurance more accessible, inclusive and robust while aligning the sector with India’s long term financial goals.
Why the government opened insurance to 100 percent FDI
By allowing full foreign ownership, the government aims to attract global insurers with deeper capital, advanced technology and global risk management expertise. Officials believe this move will improve competition, encourage innovation and help insurers reach underinsured and uninsured populations across India.
What changes for insurance companies and investors
Foreign companies can now own Indian insurance firms without requiring an Indian partner. This could lead to new market entrants, expansion of existing players and faster growth in health, life and general insurance segments. Industry experts say it may also improve solvency levels and operational efficiency across the sector.
How policyholders are expected to benefit
The bill places strong emphasis on protecting consumers. It proposes clearer regulatory powers for IRDAI, stronger grievance redressal mechanisms and the creation of a policyholders’ protection and education fund. The government argues that increased competition will also lead to better priced products and wider choices for customers.
What concerns were raised during parliamentary debate
Some opposition members questioned whether full foreign ownership could reduce domestic control over a critical financial sector. Others sought greater scrutiny through a select committee, citing data security and long term regulatory risks. Despite these concerns, the bill was passed after detailed debate in both houses.
Why this reform matters in the long run
India’s insurance penetration remains low compared to global averages. The government has set an ambitious target of achieving near universal insurance coverage by 2047. Policymakers believe this reform could be a key step toward that goal by bringing in capital, expertise and scale needed to insure a growing economy.
What happens next after the bill’s passage
With parliamentary approval secured, regulatory changes and implementation guidelines are expected in the coming months. Analysts anticipate increased merger activity, new product launches and a gradual transformation of the insurance ecosystem as global players begin to expand their presence in India.