Cabinet may consider Insurance Amendment Bill tomorrow; proposal includes raising FDI cap to 100%

The Union Cabinet is expected to take up the Insurance Amendment Bill for approval on Friday (December 12), according to people familiar with the matter. The proposed legislation includes raising the foreign direct investment (FDI) limit in insurance companies to 100%, among other structural changes.

The Bill aims to amend three key laws — the Insurance Act, the LIC Act, and the IRDAI Act — with provisions intended to expand access to capital, streamline licensing norms, and strengthen governance frameworks across the sector.

The changes form part of the government’s broader objective of achieving “Insurance for All by 2047.”

Supporters of the amendments say the increased FDI cap could support the industry’s financial depth and attract global expertise.

Narendra Bharindwal, President of the Insurance Brokers Association of India (IBAI), said that allowing full foreign ownership could bring in “global capital, innovation, technology and specialised underwriting skills,” which may enhance product variety and enable more risk-based pricing. He added that greater competition in the sector could ultimately benefit policyholders.

The Bill also proposes issuing composite licences, which would let insurers operate across life, general and health segments under a single authorisation.

This marks a shift from the current structure that requires separate licences for each vertical.