Big boost! Centre to table bill to raise FDI into insurance sector to 100% at Parliament Winter Session — What we know

The Centre

is planning to table a bill to allow foreign direct investment (FDI) in the insurance sector to be 100%, raising its ceiling in a boost to the industry.

The government will introduce the bill in the Winter Session of the Parliament, slated to begin on December 1 and continue till December 19.

The session will have 15 working days.

The plan was notified in a Lok Sabha bulletin earlier this week.

As per the bulletin, the Insurance Laws (Amendment) Bill 2025 is one of the 10 legislations listed for the upcoming session of the Parliament — the first one after Bihar Assembly elections.

The Insurance Laws (Amendment) Bill 2025 seeks to deepen penetration, accelerate growth and development of the insurance sector and enhance ease of doing business.

Currently, FDI in the insurance sector is capped at 74%.

The proposal to raise it to 100% came for the first time from Finance Minister Nirmala Sitharaman during her Budget speech in February this year.

This enhanced limit will be available for those companies which invest the entire premium in India, she said at the time.

The current guardrails and conditionalities associated with foreign investment will be reviewed and simplified, she assured.

Through FDI, the insurance sector has attracted ₹82,000 crore so far, according to PTI.

The finance ministry has proposed amending various provisions of the Insurance Act, 1938, including raising FDI in the insurance sector to 100 per cent, reducing paid-up capital, and introducing a composite licence.

Which Acts are being amended?

The Centre plans to amend the Life Insurance Corporation Act 1956 and the Insurance Regulatory and Development Authority Act 1999 as part of its comprehensive legislative exercise.

The Insurance Act 1938 is also proposed to be amended.

It has proposed to empower the board of LIC to take operational decisions, such as branch expansion and recruitment as part of the amendment to the LIC Act 1956.

The government wants to focus on driving economic growth and generating employment through the act by promoting policyholders’ interests, enhancing their financial security, and facilitating the entry of additional players into the insurance market.

Such changes will help enhance the efficiency of the insurance industry, enabling ease of doing business and enhancing insurance penetration to achieve the goal of ‘Insurance for All by 2047’.

The finance ministry would also introduce the Securities Markets Code Bill (SMC), 2025.

The Bill seeks to consolidate the provisions of the Securities and Exchange Board of India Act 1992, the Depositories Act 1996 and the Securities Contracts (Regulation) Act 1956 into a rationalised single Securities Markets Code.