RS RS passes Sabka Bima Sabki Raksha Bill through voice vote
New Delhi: The Rajya Sabha on Wednesday witnessed intense debate on the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill, 2025, which proposes raising foreign direct investment (FDI) in the insurance sector to 100 pe cent from 74 per cent, among other reforms to modernise the industry and achieve ‘Insurance for All by 2047’.
The Bill, passed by the Lok Sabha on December 16, amends the Insurance Act, 1938; Life Insurance Corporation Act, 1956; and Insurance Regulatory and Development Authority Act, 1999.
It aims to enhance ease of doing business, attract global capital, strengthen policyholder protection, and deepen penetration.
Union Finance Minister Nirmala Sitharaman defended the legislation, highlighting the government’s efforts to bolster public sector insurers.
She said the Bill is aimed at accelerating the growth and development of the insurance sector and ensuring better protection of policyholders. She noted the infusion of Rs 17,450 crore into three non-life public sector companies, leading to record profits for LIC, GIC, and Agriculture Insurance Company of India Limited (AICIL) last year.
Sitharaman outlined sectoral growth since 2014: insurers increased from 53 to 74; penetration rose from 3.3 per cent to nearly 3.8 per cent; density from $55 to $97 per person; total premiums from Rs 4.15 lakh crore to Rs 11.93 lakh crore; and assets under management tripled to Rs 74.43 lakh crore.
Progressive FDI hikes – from 26 per cent to 49 per cent, then 74 per cent – enabled foreign reinsurer branches and boosted local capacity.
In 2019, 100 per cent FDI for intermediaries improved advisory services. She praised the 56th GST Council’s decision to reduce GST on individual life and health premiums from 18 per cent to zero for affordability.
The ‘Aapki Punji, Aapka Adhikar’ campaign returned over Rs 1,000 crore in unclaimed amounts via district camps, with the Bima Bharosa portal aiding claims.
Sitharaman urged MPs to promote awareness. She assured mandatory rural and social sector obligations for all insurers, covering specified rural and underprivileged percentages.
Penalties, which are being raised from Rs 1 crore to Rs 10 crore. These would fund policyholder education. The minister also assured the House that there will be a cap on the premium, the private players will not only run government schemes as they do in crop insurance, but they also will not be able to levy a premium of their own choice.
However, the opposition criticised the Bill sharply.
DMK MP Dr Kanimozhi NVN Somu argued foreign boards would control premiums, potentially enabling black money inflows and eroding state autonomy.
She said it disadvantages cooperative insurers and “handicaps” public sector entities like LIC, quipping, “This is not Sabka Bima, but Sabka Bakwas.”
Trinamool Congress MP Saket Gokhale viewed insurance as social security, prioritising policyholders over shareholders, accusing the Bill of favouring capital without accountability.
He questioned its hasty introduction.
Opponents demanded referral to a select committee, citing risks to data privacy, profit repatriation, and sovereignty.
Supporters see 100 per cent FDI bringing expertise and affordable products, while critics fear foreign dominance.
The debate underscores balancing liberalisation with domestic protection in a sector vital for millions.
