HDFC Life, SBI Life, among other insurance stocks in focus as govt set to table insurance bill to hike FDI limit

Shares of insurance companies such as HDFC Life Insurance, SBI Life Insurance and others are expected to be in focus on Tuesday, December 16, as the government plans to introduce the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Act, 2025, in the Lok Sabha today.

The Bill seeks to raise the foreign direct investment (FDI) limit in the insurance sector from the current 74% to 100%, in a move aimed at expanding insurance penetration and achieving the goal of "insurance for all" by 2047.

The proposed legislation aims to amend key Acts, including the Insurance Act, 1938, the Life Insurance Corporation Act, 1956, and the Insurance Regulatory and Development Authority Act, 1999. It has already received the approval of the Union Cabinet, paving the way for its introduction in Parliament.


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Under the proposed amendment, although 100% FDI will be permitted, the Bill mandates that one of the top positions, Chairman, Managing Director, or CEO, must be held by an Indian citizen.

It also opens the door for mergers between insurance and non-insurance companies and proposes the creation of a Policyholders’ Education and Protection Fund.

The Bill is expected to improve the ease of doing business in the sector, increase transparency in regulatory processes, and bolster oversight. It also proposes changes to the tenure of leadership in regulatory bodies, allowing a five-year term or up to the age of 65, whichever is earlier.

Finance Minister Nirmala Sitharaman had earlier outlined this reform during her Budget speech, calling it part of a new wave of financial sector liberalisation.

So far, the insurance sector has already attracted Rs 82,000 crore in FDI. The amendments to the LIC Act further propose to empower the board to make key operational decisions like branch expansion and recruitment.

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