In a major push for the insurance industry, the Centre is set to introduce a bill in the upcoming Winter Session of Parliament to raise the foreign direct investment (FDI) limit in the sector to 100%, up from the current 74%. The session will run from December 1 to December 19, with 15 working days.
The proposal was listed in a recent Lok Sabha bulletin, which included the Insurance Laws (Amendment) Bill 2025 among 10 bills slated for discussion. This will be the first parliamentary session after the Bihar Assembly elections.
The bill aims to deepen insurance penetration, boost sectoral growth, and improve ease of doing business. The idea of raising FDI to 100% was first announced by Finance Minister Nirmala Sitharaman during her Budget speech in February. She had stated that the enhanced limit would apply to companies that invest their entire premium income within India, and promised a simplification of existing investment conditions.
The insurance sector has already attracted around ₹82,000 crore in FDI so far.
As part of the legislative overhaul, the finance ministry has proposed amendments to the Insurance Act, 1938, including lowering paid-up capital requirements and introducing a composite licence framework. The government also plans to amend the LIC Act, 1956, empowering the insurer’s board to take operational decisions such as branch expansion and recruitment.
Additionally, the Insurance Regulatory and Development Authority Act, 1999 will be part of the broader reform exercise. The overarching goal is to strengthen policyholder protection, drive economic growth, create jobs, and push insurance penetration toward the target of “Insurance for All by 2047.”
The finance ministry will also introduce the Securities Markets Code Bill (SMC), 2025, which seeks to consolidate the SEBI Act 1992, the Depositories Act 1996, and the Securities Contracts (Regulation) Act 1956 into a single, streamlined legislation.