The Bill introduces wide-ranging reforms to India's insurance framework by amending the Insurance Act, LIC Act and IRDAI Act, with a focus on liberalisation, modernisation and stronger regulation.

A key provision is the proposal to allow 100% foreign direct investment in insurance companies, aimed at attracting long-term capital, improving competition and expanding insurance coverage. The Bill also seeks to ease entry for foreign reinsurers by sharply reducing capital requirements, which could deepen reinsurance capacity and risk diversification.

Regulatory powers of IRDAI are set to be strengthened through enhanced enforcement authority, simplified compliance norms and clearer approval thresholds for equity transfers. The Bill also grants greater operational autonomy to LIC, enabling faster expansion and restructuring, including overseas operations.

While the reforms address several long-standing issues, some industry demands such as composite licences have been excluded, leading to mixed reactions. Overall, the Bill aims to balance growth, consumer protection and regulatory oversight, and is expected to see extensive debate in Parliament.

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