Sabka Bima Sabki Raksha Act 2025: 100% FDI in Insurance

Syllabus: Investment Models and Financial Sector

Ministry of Finance

Why in news?

The 'Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Act, 2025' introduces major reforms including raising the FDI limit in Indian Insurance Companies.

⚛️Static Concepts

Foreign Direct Investment RoutesInsurance Penetration vs DensityIRDAI functions

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Prelims-Oriented Points

FDI Incrase: Foreign Direct Investment limit raised from 74% to 100%.
Re-insurance: Net Owned Funds requirement for foreign re-insurers reduced from ₹5,000 cr to ₹1,000 cr.
Ease of Business: One-time registration for insurance intermediaries (replacing periodic renewals).
Share Transfer: IRDAI approval limit for transfer of shares raised from 1% to 5%.

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Examiner's Trap: FDI limit is now 100%, NOT 74% (which was the previous amendment).

Quick Data Points

FDI limit: 100%

Re-insurer Net Owned Funds: Reduced to ₹1,000 cr

Mains Value Addition

GS-3: Mobilization of Resources; Investment Models.

Capital Infusion: 100% FDI enables greater foreign capital inflow, crucial for a capital-intensive sector.
Penetration: Lower entry barriers for re-insurers will boost capacity and potentially lower premiums.
Regulatory Ease: Removal of repetitive registrations improves Ease of Doing Business.

Source

Press Information Bureau (PIB)

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