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Lok Sabha passed the Insurance Amendment Bill, 2025, raising FDI in insurance to 100 percent, amending LIC and IRDAI acts, aiming for growth and deeper insurance penetration.
News18
Insurance Amendment Bill, 2025: The Lok Sabha on Tuesday cleared the Insurance Amendment Bill, 2025, which aims to raise the FDI limit in the insurance sector from 74 per cent to 100 per cent. The Bill seeks to amend the Insurance Act, 1938, the Life Insurance Corporation Act, 1956, and the Insurance Regulatory and Development Authority Act, 1999, offering greater autonomy and authority to LIC and IRDAI.
The government’s move to increase foreign capital inflows into the insurance sector marks a significant and potentially transformative shift, expected to usher the industry into a new phase of growth.
With the FDI cap raised to 100 per cent, expectations have emerged around whether insurance policies will become cheaper in India. News18 spoke to insurance industry experts to understand whether higher foreign investment will translate into lower premiums for policyholders.
Will Insurance Policies Become Cheaper?
According to Narendra Bharindwal, President, Insurance Brokers Association of India, allowing 100 per cent FDI is a transformational reform, but policyholders should not expect an immediate reduction in premiums solely due to this change.
“Insurance pricing is driven primarily by risk, claims experience, medical inflation, reinsurance costs and regulatory pricing norms—not ownership structure alone,” Bharindwal said.
He added that while premiums may not fall right away, consumers are likely to benefit from better coverage, improved service quality, faster claim settlements, and a wider choice of products.
“Over time, these efficiencies can enhance competition, reduce operating costs, and lead to better-priced, more transparent and more customer-centric products,” he said.
Long-Term Impact on Pricing
Echoing similar views, Abhishek Bansal, Chief Revenue Officer, InsuranceDekho, told News18 that it is too early to conclude whether policy rates will come down immediately.
“While the Bill can improve long-term efficiency and competition, pricing decisions depend on a variety of factors, so any benefits will play out over time,” he said.
Boost to Insurance Penetration
Commenting on the FDI hike, Peuli Das, Partner – Actuarial Services, BDO India, told News18 that the move will help deepen insurance penetration in the country.
“It will foster insurance penetration and advance the long-awaited reformative vision of ‘Insurance for All’ by 2047, leading to higher volumes, economies of scale, reduced expenses, more competitive products, and potentially lower policy rates over time,” she said.
Click here to add News18 as your preferred news source on Google. December 17, 2025, 14:38 IST
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