Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Act, 2025

On December 20, 2025, the President of India gave assent to the Sabka Bima Sabki Raksha Act, 2025, amending the Insurance Act, 1938, LIC Act, 1956, and IRDAI Act, 1999. The Act addresses India’s low insurance penetration of 4% of GDP and aims to diversify the reinsurance market.

Major Provision	Details
Foreign Investment & Capital	The FDI limit in Indian insurance companies is increased from 74% to 100%. To encourage foreign re-insurers, the Net-Owned Fund (NOF) requirement is reduced from Rs. 5,000 crore to Rs. 1,000 crore.
Operational Reforms	The threshold for IRDAI approval on share transfers is raised from 1% to 5%. For insurance co-operative societies, the mandatory Rs. 100 crore minimum capital requirement is removed.
Regulatory & Global Reach	IRDAI’s powers are enhanced to supersede boards and appoint administrators. The Act also extends its applicability to International Financial Services Centres (IFSCs) within SEZs.
Consumer Protection	A dedicated Policyholders’ Education and Protection Fund will be established and administered by IRDAI to safeguard interests and spread awareness.

PT Facts

Assent Date: 20 December 2025.
Amends: Insurance Act 1938, LIC Act 1956, and IRDAI Act 1999.
FDI Limit: Increased from 74% to 100%.
Share Transfer Approval: Threshold raised from 1% to 5%.
IFSC Link: Applicability extended to IFSCs within SEZs.
Consumer Protection: Policyholders’ Education and Protection Fund.

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