The Parliament of India has passed the Insurance Laws (Amendment) Bill, 2025, marking a major reform in India’s insurance sector aimed at attracting global investment and strengthening insurance penetration.
The Bill was approved by the Lok Sabha on December 16, 2025, and subsequently cleared by the Rajya Sabha on December 17, 2025, during the Winter Session of Parliament. With the passage in both Houses, the legislation now awaits Presidential assent before coming into force.
A key provision of the amendment allows up to 100 per cent Foreign Direct Investment (FDI) in the insurance sector, subject to regulatory safeguards. The reform is intended to enhance the financial strength of insurers, enable access to advanced global expertise, and support the development of innovative insurance products for Indian consumers.
Government sources have stated that regulatory oversight by the Insurance Regulatory and Development Authority of India (IRDAI) will continue to ensure policyholder protection, solvency norms, and systemic stability. The amendment also aligns with the broader national objective of expanding insurance coverage and improving financial inclusion.
The reform is expected to play a significant role in strengthening the resilience of the insurance sector, particularly in the context of rising healthcare needs, climate-related risks, and economic uncertainties.
