The Centre is set to push ahead with a major reform in the insurance sector by introducing a bill to raise the foreign direct investment (FDI) limit to 100 per cent during the upcoming winter session of Parliament. The session is scheduled from December 1 to 19 and will comprise 15 working days.

A Lok Sabha bulletin cited by PTI listed the Insurance Laws (Amendment) Bill, 2025, among the ten key legislations scheduled for consideration. The bill aims to broaden insurance penetration, spur growth and development in the sector and significantly improve ease of doing business.

Finance minister Nirmala Sitharaman had earlier flagged the proposal in her union budget speech this year, calling for an increase in the FDI ceiling from 74 per cent to 100 per cent as part of a package of next-generation financial sector reforms.

Foreign investment in the insurance sector has cumulatively touched around ₹80,000 crore, but it is still only a small part of the industry’s overall capital base. To build on this momentum, the finance ministry has proposed a series of amendments to the Insurance Act, 1938, including lowering paid-up capital requirements and enabling a composite licence regime that would permit companies to offer multiple categories of insurance under a single licence structure.

As part of a comprehensive legislative exercise, amendments will also be introduced to the Life Insurance Corporation Act, 1956, and the Insurance Regulatory and Development Authority Act, 1999.

Proposed changes to the LIC Act are designed to enhance operational autonomy for the state-owned insurer by empowering its board to take key decisions independently — such as opening new branches and undertaking recruitment — without requiring prior government clearances.

The overarching objective of the proposed amendments is to strengthen the protection of policyholders, improve financial security and encourage the entry of new players into the insurance market. These steps are expected to bolster competition, expand coverage and contribute to the government’s long-term target of achieving ‘Insurance for All by 2047’. The reforms are also seen as vital for boosting efficiency within the industry and supporting broader economic growth and employment generation.

Alongside the insurance reforms, the finance ministry will introduce the Securities Markets Code Bill (SMC), 2025, which seeks to consolidate three major securities laws — the SEBI Act, 1992, the Depositories Act, 1996, and the Securities Contracts (Regulation) Act, 1956 — into a unified and streamlined regulatory framework. The consolidation aims to rationalise oversight, reduce regulatory overlaps, and create a more cohesive structure for India’s capital markets.

In addition, the ministry will present the first batch of Supplementary Demands for Grants for 2025–26, seeking Parliamentary approval for additional expenditure beyond the Budget. The second and final batch of Supplementary Demands is expected to be tabled during the Budget session beginning later in January.