Amended insurance laws kick in from February 5

The Central government exercised its powers under Section 1(2) of the Act to appoint February 5 as the commencement date.

The government has notified February 5, 2026, as the date for enforcement of most provisions of the Sabka Bima Sabki Raksha (amendment of insurance laws) Act, 2025, formally operationalising a major reform package for India’s insurance sector.

A gazette notification by the finance ministry on February 3 that all provisions of the Act, except Section 25, will come into force from February 5.

The regulations include governance, capital participation (including 100 percent FDI), policyholder protection measures and institutional oversight, which would will become operational immediately, while Section 25 has been kept out of the first phase of implementation.

Section 25, according to industry practitioners, relates to strengthened governance and conflict-of-interest rules, including restrictions on common directorships and overlapping control across insurers, banks and investment companies. Its exclusion indicates that this specific governance provision would be implemented later, likely rule-making, regulatory clarifications and operational frameworks are put in place by the government and the regulator.

“The implementation of the amended insurance laws permitting 100 percent FDI represents a major step forward for India’s insurance sector, offering long-term clarity and reinforcing confidence among global and domestic stakeholders,” said Hanut Mehta, CEO and co-founder of Bimapay Finsure. “More than just higher capital participation, the reforms focus on strengthening governance, enhancing transparency, and prioritising policyholder interests across the ecosystem.”

Mehta pointed to structural safeguards embedded in the reforms, including the creation of a dedicated policyholder education fund, alignment with the Digital Personal Data Protection (DPDP) Act for data protection, and a more consultative regulatory approach.

“These measures signal a clear shift towards a consumer-centric and trust-based market, which will be essential in sustaining credibility as global participation increases,” he said.