Daijiworld Media Network - New Delhi

New Delhi, Dec 17: The Rajya Sabha on Wednesday witnessed a heated exchange over the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill, 2025, which seeks to raise the foreign direct investment (FDI) limit in the insurance sector from 74 per cent to 100 per cent and introduce wide-ranging reforms to modernise the industry with the goal of achieving “Insurance for All by 2047.”

The legislation, which was cleared by the Lok Sabha a day earlier, proposes amendments to the Insurance Act, 1938, the Life Insurance Corporation Act, 1956, and the Insurance Regulatory and Development Authority Act, 1999. The government says the Bill is designed to improve ease of doing business, attract global investment, enhance policyholder protection, and deepen insurance penetration across the country.

Defending the Bill, Finance Minister Nirmala Sitharaman said the reforms would accelerate sectoral growth while strengthening safeguards for policyholders. She highlighted the government’s support to public sector insurers, noting that an infusion of Rs 17,450 crore into three non-life public sector companies had contributed to record profits for LIC, GIC and the Agriculture Insurance Company of India Limited in the previous year.

Sitharaman pointed to the sector’s expansion since 2014, with the number of insurers rising from 53 to 74, insurance penetration increasing from 3.3 per cent to nearly 3.8 per cent, and insurance density growing from $55 to $97 per capita. Total premiums, she said, had jumped from Rs 4.15 lakh crore to Rs 11.93 lakh crore, while assets under management had nearly tripled to Rs 74.43 lakh crore.

She argued that successive increases in the FDI cap — from 26 per cent to 49 per cent and then to 74 per cent — had strengthened domestic capacity and enabled the entry of foreign reinsurers. Allowing 100 per cent FDI for insurance intermediaries in 2019, she added, had improved advisory services. Sitharaman also cited the GST Council’s decision to exempt individual life and health insurance premiums from GST, making coverage more affordable.

The Finance Minister highlighted initiatives such as the ‘Aapki Punji, Aapka Adhikar’ campaign, which helped return over Rs 1,000 crore of unclaimed funds through district-level camps, and the Bima Bharosa portal for grievance redressal. She assured the House that all insurers would continue to meet mandatory rural and social sector obligations, and that penalties for violations would be increased from Rs 1 crore to Rs 10 crore, with the proceeds used for policyholder education.

Addressing concerns over pricing, Sitharaman said private insurers would not be allowed to charge premiums arbitrarily and would be subject to regulatory caps, including while implementing government schemes such as crop insurance.

Opposition members, however, strongly opposed the Bill. DMK MP Dr Kanimozhi NVN Somu warned that full foreign ownership could allow overseas boards to control premium pricing, enable black money inflows and weaken state autonomy. She argued that the move would disadvantage cooperative insurers and undermine public sector institutions like LIC, remarking that the Bill was “not Sabka Bima, but Sabka Bakwas.”

Trinamool Congress MP Saket Gokhale said insurance should be treated as a social security instrument rather than a profit-driven business, accusing the government of prioritising capital interests over policyholders. He also questioned the speed with which the Bill was introduced and debated.

Several opposition members demanded that the legislation be referred to a select committee, citing concerns over data security, profit repatriation and national sovereignty. While supporters maintained that 100 per cent FDI would bring expertise, innovation and more affordable products, critics cautioned against foreign dominance in a sector that plays a crucial role in financial security for millions of Indians.

The debate highlighted the challenge of balancing liberalisation with domestic safeguards in one of the country’s most sensitive and socially significant industries.