The government will introduce a bill in the upcoming Winter session of Parliament to raise foreign direct investment (FDI) in the insurance sector to 100 percent, up from the current 74 percent.
The Winter session is scheduled from December 1 to December 19 and will have 15 working days. According to a Lok Sabha bulletin as cited by PTI, the Insurance Laws (Amendment) Bill 2025 is among 10 legislations listed for the session.
What the bill proposes
The Insurance Laws (Amendment) Bill 2025 seeks to deepen insurance penetration, accelerate growth and development of the sector, and improve ease of doing business.
The finance ministry has proposed amendments to provisions of the Insurance Act, 1938. Key changes include:
- raising the FDI limit in insurance to 100 percent,
- reducing paid-up capital requirements, and
- introducing a composite licence.
As part of the legislative package, the government also plans to amend the Life Insurance Corporation Act, 1956 and the Insurance Regulatory and Development Authority Act, 1999, alongside changes to the Insurance Act, 1938.
LIC board powers to be expanded
The proposed amendments to the LIC Act would empower LIC’s board to take certain operational decisions, including branch expansion and recruitment.
Context: Budget announcement and FDI inflows
Finance Minister Nirmala Sitharaman had announced the proposal to raise the foreign investment cap to 100 percent in her Budget speech this year, describing it as part of new-generation financial sector reforms.
So far, the insurance sector has attracted around Rs 82,000 crore through FDI.
Policy intent stated by government
The proposed amendment is aimed at promoting policyholders’ interests, enhancing financial security, and facilitating the entry of additional players in the insurance market, with the stated objective of supporting economic growth and employment generation.
The government has said such changes would improve efficiency and help raise insurance penetration toward the target of “Insurance for All by 2047.”
Other finance bills in the session
The finance ministry will also introduce the Securities Markets Code Bill (SMC), 2025. The bill seeks to consolidate the SEBI Act 1992, the Depositories Act 1996, and the Securities Contracts (Regulation) Act 1956 into a single Securities Markets Code.
In addition, the ministry will present the first batch of Supplementary Demands for Grants for 2025–26, seeking Parliament’s approval for additional spending outside the Budget. A second and final batch is expected in the Budget session, likely to begin toward the end of January.
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