NEW DELHI: The Parliament on Wednesday cleared the new insurance bill that allows 100% FDI. The “Sabka Bima Sabki Raksha Bill” was passed in Rajya Sabha, a day after getting Lok Sabha’s nod. This comes despite several Rajya Sabha opposition members’ demands that it’s referred to a Parliamentary committee fir further scrutiny. The members also objected to the Bill’s title, noting that it uses both English and Hindi.The debate on the bill began after being moved by finance minister Nirmala Sitharaman for consideration. The bill, cleared by Union Cabinet earlier aims to transform India’s insurance sector, making coverage access easier and facilitating universal protection by 2047. This will include major changes, lined up for the Insurance Act, 1938, the LIC Act, 1956, and the IRDA Act, 1999.Also read: Lok Sabha clears ‘SHANTI’ bill as opposition walks out; paves way for entry of private playersThe proposed amendments
- Raising foreign direct investment in the insurance sector from 74 per cent to 100 per cent, while mandating that at least one of the top executives, the chairman, managing director, or chief executive officer, must be an Indian citizen.
- Introducing sector-specific licences, allowing insurers to operate in specialised segments such as cyber, property, or marine insurance, with the government empowered to notify additional classes of business in consultation with the Insurance Regulatory and Development Authority of India (IRDA).
- Allowing mergers between insurance and non-insurance companies.
- Moving away from detailed statutory provisions to a regulation-led framework, granting IRDA the authority to prescribe operational norms—including capital requirements, solvency margins, and investment conditions—through regulations rather than Parliamentary legislation.
- Empowering IRDA to set limits on commissions and remuneration for insurance agents.
- Creating a Policyholders’ Education and Protection Fund, to be financed through penalties levied on insurers.
- Expanding the definition of insurance intermediaries to include entities such as insurance repositories.
- Easing licensing norms for surveyors and loss assessors, with regulatory oversight replacing statutory control.
- Allowing the Life Insurance Corporation of India to set up zonal offices without prior Central government approval and permitting its overseas branches to maintain funds abroad.
- Providing for a five-year tenure for the IRDA chairperson and other whole-time members, or until they attain the age of 65 years, whichever is earlier.
Sitharaman had first talked about this bill in her budget speech in February. So far, the sector has attracted foreign direct investment of about Rs 82,000 crore.
