New Delhi: The Centre is preparing to introduce a landmark bill in the upcoming Winter session of Parliament to raise foreign direct investment (FDI) in the insurance sector to 100 per cent, marking one of the most significant policy shifts in recent years. The Winter session will run from December 1 to 19, covering 15 working days, and will see the government advance several major financial sector legislations.
Key Amendments to Drive Growth and Ease of Doing Business
According to a Lok Sabha bulletin, the Insurance Laws (Amendment) Bill, 2025 is among the 10 legislations listed for consideration during the session. The bill seeks to deepen insurance penetration, improve the ease of doing business and boost the sector’s growth potential. Finance Minister Nirmala Sitharaman had first proposed increasing the foreign investment cap from 74 per cent to 100 per cent in her Union Budget speech earlier this year as part of the government’s new-generation financial sector reforms.
The insurance sector has already attracted Rs 82,000 crore in FDI so far. The proposed amendments aim to accelerate this inflow by relaxing key provisions of the Insurance Act, 1938. These include raising the foreign investment limit, reducing required paid-up capital, and enabling composite licences that allow insurers to operate multiple insurance lines under one framework.
Changes Proposed Across LIC Act, IRDAI Act
In a wide-ranging legislative overhaul, the government also intends to amend the Life Insurance Corporation Act, 1956 and the Insurance Regulatory and Development Authority of India Act, 1999. Changes to the LIC Act will empower its board to take operational decisions independently, such as opening new branches or hiring staff. The broader objective of these amendments is to protect policyholders' interests, strengthen financial security, enable more players to enter the market and support India’s long-term goal of “Insurance for All by 2047”.
The Insurance Act of 1938 will remain the foundational law governing insurer–policyholder–regulator relationships, but its provisions will be modernised to meet current industry needs.
Securities Markets Code Also on Agenda
The finance ministry will also table the Securities Markets Code Bill, 2025, aimed at consolidating SEBI Act 1992, Depositories Act 1996 and Securities Contracts (Regulation) Act 1956 into a single unified legislation. Additionally, the ministry will present the first batch of Supplementary Demands for Grants for 2025–26.
