Union Cabinet likely to have approved Insurance Amendment Bill

The Union Cabinet has likely approved the Insurance Amendment Bill, sources said. The government is expected to introduce the Bill in Parliament on Monday (December 15).

The Bill, which proposes raising the FDI limit in insurance companies to 100% among other changes, aims to expand capital access, simplify licensing, and strengthen governance in the sector.

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.”

Industry representatives said the move could mark a significant shift for India’s insurance market.

Narendra Bharindwal, President of the Insurance Brokers Association of India (IBAI), said the Cabinet’s approval represents “a major, transformational reform,” adding that full opening to foreign capital could help insurers access long-term funds, global expertise and advanced risk-management practices.

He noted that this may support deeper market penetration, drive product innovation and improve service capabilities.

At the same time, he emphasised the need for strong governance, solvency discipline and policyholder protection as the sector evolves.

Sharad Mathur, MD and CEO of Universal Sompo General Insurance, said the proposed FDI hike “can serve as a strong catalyst” for the industry. Greater capital inflows, he said, would help insurers strengthen balance sheets, improve risk-assessment and claims-management systems and expand into under-penetrated regions such as Tier-3 cities.

According to Mathur, better data use and more accurate pricing could follow, making the sector more resilient.

Sanjay Kedia, CEO of Marsh McLennan India and President & CEO of Marsh India, said permitting 100% FDI “represents a transformative step for India’s risk and protection landscape.”

The move, he said, could bring global best practices, advanced capabilities and improved underwriting strength, supporting deeper market penetration and product innovation.