INSURANCE REFORM: INVESTOR-FRIENDLY, CONSUMER-LIGHT?

Regulatory blindspot

- DHIRENDRA KUMAR

The Indian Parliament passed the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill, 2025, earlier in December with characteristic speed, amending insurance laws that have remained largely unchanged for decades. The legislation permits 100% FDI in Indian insurance companies, lowers capital requirements for reinsurers, and tweaks various regulatory thresholds.

Upon reading through the bill's provisions, one can notice that the new legislation aims to foster a favourable environment for investors, foreign companies seeking entry, and entities operating in special economic zones, but has few meaningful provisions to address what actually ails India's insurance sector.

To be fair, the bill is probably necessary. Opening up the sector to greater foreign participation could bring capital, expertise, and competitive pressure.