Relevance: GS-III (Indian Economy – Financial Sector), GS-II (Parliament) | Source: The Hindu ; Parliamentary Debate, Government Statements

News

Parliament has passed the Sabka Bima Sabki Raksha Bill, allowing 100 percent foreign investment in insurance companies and updating India’s insurance regulatory and legal framework. The Bill also repeals 71 obsolete laws.

Key Features

• Full foreign ownership permitted in insurance firms for the first time in India.
  • Mergers allowed between insurance and non-insurance companies.
  • Commission limits for intermediaries to be set through regulation.
  • Mandatory compliance with Digital Personal Data Protection Act for handling policyholder data.
  • Premiums collected in India must stay within the country to ensure financial stability.

Significance and Concerns

The government argues this will increase capital availability, improve competition, lower premiums, and support India’s goal of expanding insurance penetration, especially in rural and low-income groups.
Opposition concerns include privacy risks, foreign dominance, and the need for deeper parliamentary scrutiny.

Q. With reference to the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill, 2025, consider the following statements:

1. It allows one hundred percent foreign ownership of insurance companies.
2. It mandates compliance with the Digital Personal Data Protection Act for all insurance data.
3. It abolishes the power of the Insurance Regulatory and Development Authority of India to regulate commissions.

How many statements are correct?
A. One only
B. Two only
C. All three
D. None