The Insurance Amendment Bill, which is set to be introduced in Parliament after receiving cabinet approval, aims to increase the foreign direct investment (FDI) limit in the insurance sector to 100%. The proposed legislation seeks to raise the FDI cap from 74% and eliminate the minimum paid-up equity capital requirement of Rs 100 crore for life, general, and health insurance businesses.

This will make it easier for new players to enter the market. One notable aspect of the bill is the introduction of a composite licence, which will allow companies to offer life, non-life, and health insurance products under a single licence.

The Insurance Regulatory and Development Authority of India (IRDAI) has been advocating for these changes, as it believes that substantial capital is necessary to achieve the government's goal of providing "insurance for all" by 2047. The draft bill is said to be ready and awaiting final approvals before being presented to the cabinet.