Parliament Approves Sabka Bima Sabki Raksha Bill To Strengthen Insurance Oversight

The Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill, 2025, was passed by Parliament on December 19, 2025, amending the Insurance Act, 1938, the LIC Act, 1956, and the IRDAI Act, 1999.

The bill gives the Insurance Regulatory and Development Authority of India (IRDAI) greater powers to regulate insurers, including issuing binding directions, capping commissions, imposing higher penalties, and ordering disgorgement of wrongful gains. It also establishes the Policyholders’ Education and Protection Fund, financed through penalties, to support awareness campaigns. Insurers must maintain detailed electronic records of policies and claims for regulatory review. The amendments aim to improve market discipline, expand insurance coverage, and support financial inclusion, while leaving operational details, including claims processing timelines, to regulatory enforcement. The bill also removes the cap on foreign direct investment (FDI) in insurance, encouraging capital infusion and product innovation.