SYLLABUS

GS 2:  Indian Constitution—historical underpinnings, evolution, features, amendments, significant provisions and basic structure.

GS 3: Inclusive growth and issues arising from it.

Context: Recently, the Rajya Sabha passed the "Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill, 2025" to modernise the insurance industry and achieve the goal of "Insurance for All by 2047."

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• The bill was introduced in the Lok Sabha on December 16, 2025, seeking to amend the Insurance Act, 1938, the  Life Insurance Corporation of India (LIC) Act, 1956, and the Insurance Regulatory and Development Authority (IRDAI) Act, 1999.

• The bill aims to improve ease of doing business, attract global capital, strengthen policyholder protections, and broaden insurance access.

• “Insurance for All by 2047” is an ambition of IRDAI launched in 2023.

Key Features of the Sabka Bima Sabki Raksha Bill

• The Bill proposes to increase the Foreign Direct Investment (FDI) limit in Indian Insurance companies from 74% to 100% of the paid-up equity capital.

o Paid-up capital refers to the equity capital that has been fully paid by shareholders in exchange for ownership interests.

• It reduces the net-owned fund requirements for foreign entities engaged in the re-insurance business from Rs 5,000 crore to Rs 1,000 crore. 

• Under the Insurance Act 1938, a public company in the insurance business is allowed to register the transfer of its shares only after the approval of the IRDAI. 

o Insurance business refers to effecting insurance contracts and any other contracts notified by the Central Government in consultation with the Authority.

o An approval for registration from IRDAI is required in all cases where the value of the shares to be transferred exceeds 1% of the paid-up share capital of the insurer.  

o The Bill proposes to increase this threshold to 5% of the paid-up share capital of the insurer. 

• The Bill amends the definition of an insurance co-operative society to remove the requirement of minimum paid-up share capital of Rs 100 crore for life, general, and health insurance businesses.

o Insurance co-operative society means an insurer being a co-operative society formed and registered on or after the commencement of the Insurance (Amendment) Act, 2002

• The Bill extends the central government’s power under the Insurance Act to exempt, modify, or adapt provisions not only for insurers in Special Economic Zones (SEZs).

o It also for those in International Financial Services Centres (IFSCs) within SEZs, and applies these powers to insurance intermediaries operating in both.

• The Bill expands the definition of intermediaries to include managing general agents and insurance repositories, in addition to brokers, insurance consultants, and third-party administrators.

• The Bill provides for the constitution of a Policyholders’ Education and Protection Fund to be administered by IRDAI.

• IRDAI is also set to receive enhanced enforcement powers, including the authority to disgorge wrongful gains made by insurers or intermediaries.

• It also empowers IRDAI to supersede the Board of Directors of an insurer where it appoints an Administrator.

About Insurance Regulatory and Development Authority of India (IRDAI)

• IRDAI is an autonomous statutory body established under the Insurance Regulatory and Development Authority Act, 1999, for overall supervision and development of the Insurance sector in India. 

• It is formed following recommendations from the Malhotra Committee (1994) to oversee and develop the insurance sector in India.

• The powers and functions of the Authority are laid down in the IRDA Act, 1999 and the Insurance Act, 1938. 

• It is Headquartered in Hyderabad, India.

Source :
PRS 
IRDAI 
DD News 
BFSI