Insurance: Insurance is possible for all

alt="Eenadu icon" class="img-fluid rounded">By Business News Desk Published : 21 Dec 2025 03:00 IST Ee Font size
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Today, Hyderabad: An opportunity to reach the goal of providing insurance protection to all the people of the country is available with the amendment of insurance laws. Edge Ratings has analyzed the latest. It is known that by 2047, the Center has set a target to have compulsory insurance coverage for all people. Accordingly, the Rajya Sabha passed the Insurance Laws (Amendment) Bill-2025 on 17th of this month under the name Sabka Bima, Sabki Raksha. It includes many aspects related to insurance companies, re-insurance companies, intermediaries, growth opportunities, insurance consumer protection.

100% FDI opportunity

With this amendment bill, there have been changes in Insurance Act-1938, LIC Act-1956, IRDAI Act-1999. One hundred percent foreign direct investment (FDI) is getting a chance especially in insurance companies. Currently this limit is up to 74%. Henceforth foreign companies can enter insurance business with 100% investment without Indian partner. The current law amendment will reduce net owned funds requirements for foreign re-insurance companies. IRDAI will also have greater regulatory powers over insurance companies and intermediary companies. In particular, there will be an opportunity to control the commissions given to insurance agents. The way has been paved for setting up 'Policy Holders Education and Protection Fund'. Henceforth, the information will have to be taken as per the provisions of the Digital Personal Data Protection (DPDP) Act- 2023.

Some insurance reforms have not found a place in the current law amendment. Issue of composite license, relaxation of capital rules for new insurance companies, captive insurers, open agent policy... etc. have not been taken into consideration by the government. 

Good for the industry

Sanjay Aggarwal, Senior Director, Care Edge Ratings stated that allowing 100% FDI will increase the availability of capital funds for insurance companies and consequently people will be closer to insurance policies. He also said that insurance companies will be strengthened financially. On the whole, with these reforms, insurance provision will expand and the insurance industry will have a chance of steady growth, he explained. It is analyzed that giving additional powers to IRDAI will benefit the industry.

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