New Delhi | The Lok Sabha on Tuesday passed a bill to raise FDI in the insurance sector to 100 per cent, with a view to providing insurance to all by 2047.

Replying to a debate on the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill, 2025, in the Lower House, Finance Minister Nirmala Sitharaman said higher FDI will attract more players in the industry and make insurance policies more affordable.

"Monopoly doesn't give us that advantage, and therefore, the more the competition, the better the rates," she added.

"Another priority which our government has given is to strengthen the public sector insurance companies...since 2014, we have been doing a lot of things to improve their financial health," the minister said.

The Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill, 2025, would lead to amendments in the Insurance Act, 1938, the Life Insurance Corporation Act, 1956, and the Insurance Regulatory and Development Authority Act, 1999.

The amendment seeks to raise the foreign direct investment (FDI) limit in the insurance sector from 74 per cent to 100 per cent, according to the bill.

It also paves the way for the merger of a non-insurance company with an insurance firm.

The Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill, 2025, received the Union Cabinet's nod on Friday.

The Bill further aims to accelerate the growth and development of the insurance sector and ensure better protection of policyholders, as per the statement of objects and reasons.

The bill provides for the establishment of the Policyholders' Education and Protection Fund to protect policyholders' interests.

It would also improve the ease of doing business for insurance companies, intermediaries, and other stakeholders, bring transparency to regulation-making, and enhance regulatory oversight over the sector.

With regard to the term of office of the Chairperson and other whole-time members, the bill provides for a five-year term or until they attain the age of 65 years, whichever is earlier, it said.

At present, the upper age limit for whole-time members is 62 years, while for the Chairman it is 65 years.