A Lok Sabha bulletin states that the Insurance Laws (Amendment) Bill 2025 is among the 10 legislations listed for the session. The bill aims to deepen insurance penetration, boost the sector’s growth and development, and improve the ease of doing business.
In this year’s Budget speech, Finance Minister Nirmala Sitharaman proposed increasing the FDI limit from 74 per cent to 100 per cent under new-generation financial sector reforms. The insurance sector has so far received Rs 82,000 crore in FDI.
The finance ministry has also proposed amending multiple provisions of the Insurance Act, 1938, including changes on paid-up capital and the introduction of a composite licence.
Along with the Insurance Act, the Life Insurance Corporation Act 1956 and the Insurance Regulatory and Development Authority Act 1999 will also be amended as part of the legislative exercise. The amendments to the LIC Act aim to empower its board to take operational decisions including branch expansion and recruitment. The proposed changes are focused on policyholder interests, strengthening financial security, and enabling more players to enter the market, which is expected to support economic growth and job creation.
These reforms are intended to improve the insurance industry’s efficiency, support ease of doing business, and boost penetration to achieve the goal of ‘Insurance for All by 2047’.
The Insurance Act, 1938 is the main law governing the insurance sector in India and regulates insurers’ functioning and their relationship with policyholders, shareholders, and the regulator, Irdai.
The finance ministry will also introduce the Securities Markets Code Bill (SMC), 2025, aimed at consolidating the SEBI Act 1992, the Depositories Act 1996, and the Securities Contracts (Regulation) Act 1956 into a unified code.
In addition, the ministry will present the first batch of Supplementary Demands for Grants for 2025-26, seeking Parliament’s approval for additional expenditure beyond the Budget. The second and final batch will be taken up in the Budget session likely to begin towards the end of January.
