Overview
- Parliament cleared the Sabka Bima Sabki Raksha Bill, amending the Insurance Act, the LIC Act and the IRDAI Act, positioning the measure to take effect through regulator-made rules.
- Key changes boost IRDAI powers to cap commissions, disgorge wrongful gains and extend inspections to intermediaries, while creating a Policyholders’ Education and Protection Fund.
- The law lifts the FDI cap to 100%, permits mergers between non-insurance firms and insurers, raises the share-transfer approval threshold to 5% and lowers foreign reinsurers’ net-owned funds to Rs 1,000 crore.
- The government argues the reforms will draw capital and technology to widen coverage, reduce premiums and support jobs, with officials stressing participation in public schemes and retention of collected premiums in India.
- Opposition parties and LIC unions protested and sought panel scrutiny, warning about risks to domestic players and rural coverage, as analysts cautioned that immediate FDI inflows may be limited given past trends and distribution hurdles.