Insurance Reforms Will Boost Penetration, Promote Competition, Ease Compliance: FM Sitharaman
"We are now looking for greater penetration, better regulatory oversight, easier compliance, and more FDI," Sitharaman said.
Finance Minister Nirmala Sitharaman on Tuesday said the insurance sector reforms proposed in Parliament will lead to greater access to insurance for people, more players in the sector and robust regulatory setup.
She tabled 'The Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill, 2025' in Lok Sabha, which seeks to amend Insurance Act, 1938, Life Insurance Corporation Act, 1956, and Insurance Regulatory and Development Authority Act, 1999.
"The bill aims at bringing transperancy, easing compliance mandate, and increasing FDI," the minister told lawmakers in the lower house.
She noted that foreign direct investment limit in the sector was increased from 26% to 49% in 2015, 74% in 2021 and now proposed to 100%. "These have brought in greater push for the insurance sector. The number of insurers has risen from 53 in 2014 to 74 now."
The minister also said insurance penetration has improved from 3.3% to 3.8%, insurance density, i.e. average insurance premium paid per person in a year, has jumped from $55 in 2014 to $97, total insurance premium rose from Rs 4.15 lakh crore in 2014 to Rs 11.9 lakh crore and assets under management increased from Rs 24.2 lakh crore to Rs 74.4 lakh crore.
"We are now looking for greater penetration, better regulatory oversight, easier compliance, and more FDI," Sitharaman said.
The bill received the Union Cabinet's nod on Friday, paving the way for its introduction in Parliament.
Despite allowing a hike in FDI cap in the insurance sector to 100%, one of the top officials — Chairman, Managing Director, or CEO — must be an Indian citizen.
The Insurance amendment bill further aims to accelerate the growth and development of the insurance sector and to ensure better protection of policyholders, as per the statement of objects and reasons.
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, it said.
