The Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill, 2025: Expanding Coverage and Consumer Choice
SDG 8: Decent Work and Economic Growth | SDG 10: Reduced Inequalities
Ministry of Finance | Insurance Regulatory and Development Authority of India (IRDAI)
Introduced in the Lok Sabha on December 16, 2025, the Sabka Bima Sabki Raksha Bill, 2025 proposes a major overhaul of India’s insurance sector by amending the Insurance Act, 1938, the Life Insurance Corporation Act, 1956, and the IRDAI Act, 1999. The Bill aims to enhance insurance penetration, improve ease of doing business, and provide greater flexibility for both insurers and policyholders.
Key Features of the Bill:
Composite Licensing: Introduces a paradigm shift by allowing a single entity to obtain a composite license to undertake life, general, and health insurance businesses simultaneously.
Differential Capital Requirements: Empowers the Central Government to prescribe different minimum paid-up equity capital requirements for various classes of insurance, including micro-insurance, regional insurance, and specialized insurance.
Removal of Investment Caps: Seeks to provide insurers with greater operational flexibility by allowing the Authority (IRDAI) to specify investment norms, potentially removing rigid statutory caps on certain asset classes.
Policyholder Protection: Strengthens the framework for the protection of policyholders’ interests, including clearer mandates for the Insurance Advisory Committee and enhanced supervisory powers for IRDAI over the Tariff Advisory Committee.
Gender-Neutral Language: Formally updates the legal text to use gender-neutral terms, replacing “he, him or his” with “it or its“ when referring to insurers.
What is a Composite License? A composite license is a single regulatory authorization that allows an insurance company to offer multiple types of insurance—such as life, health, and general (motor, home, etc.)—under one corporate umbrella, rather than requiring separate companies and capital for each.
Policy Relevance
The Bill is a cornerstone of the government’s “Insurance for All by 2047“ mission, aiming to transform India into a global insurance hub through deep structural reforms.
Boosting Penetration: By allowing for regional and micro-insurance licenses with lower capital requirements, the Bill encourages the entry of niche players who can cater to under-served rural and low-income populations.
Consumer Convenience: Composite licensing enables “one-stop-shop” solutions for consumers, allowing them to manage all their insurance needs with a single provider and potentially reducing premium costs through operational efficiencies.
Ease of Doing Business: Moving from rigid statutory rules to regulation-based oversight (where IRDAI sets specific norms) allows the sector to adapt more quickly to technological changes and market innovations like “InsurTech”.
Follow the full news here: THE SABKA BIMA SABKI RAKSHA (AMENDMENT OF INSURANCE LAWS) BILL, 2025