Parliament Parliament of India
Bill permits foreign investment in Indian insurance sector
This Bill amends existing insurance laws to modernize definitions, allow 100% foreign investment in Indian insurance companies, and update regulatory requirements for insurers and intermediaries.
Who it concerns: The Bill affects insurers (including Indian insurance companies, insurance co-operative societies, and foreign re-insurance entities), insurance intermediaries (such as brokers, agents, and consultants), and foreign investors holding equity in Indian insurance companies.
What the bill does
- Substitutes the term 'business of insurance' with 'insurance business' throughout the Insurance Act, 1938.
- Defines 'class of insurance business' to include life, general, health, and re-insurance business, as well as other classes notified by the Central Government.
- Allows foreign investors, including portfolio investors, to hold up to 100% of the paid-up equity capital in an Indian insurance company.
- Requires foreign insurers registered in India to have net owned funds of not less than one thousand crore rupees.
- Prohibits non-insurers from using words like 'insurance', 'insurer', or 'assurance' in their names or business connections.
- Exempts insurers and intermediaries in Special Economic Zones and International Financial Services Centres from certain provisions of the Act, subject to specified modifications.
- Replaces references to the 'Controller' with the 'Authority' (Insurance Regulatory and Development Authority) in specific sections.
Also in the document
- The Bill is an amendment to the Insurance Act, 1938, the Life Insurance Corporation Act, 1956, and the Insurance Regulatory and Development Authority Act, 1999.
- It explicitly clarifies that 100% foreign direct investment is permitted to accelerate growth in the insurance sector.
- The Act comes into force on a date appointed by the Central Government via notification in the Official Gazette.
Where this bill is now: Became law (Act)
How this was written
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The original document
Parliament of India — Bills (Lok Sabha & Rajya Sabha)
Bill / law · Ref. 195 · 16 Dec 2025
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