AIIEA terms Insurance Amendment Bill as irrational

With the Insurance Amendment Bill, 2025, being tabled in the Lok Sabha, the northern chapter of the All India Insurance Employees Association (AIIEA) has raised concerns surrounding the bill, terming it “irrational” for the government to enhance the Foreign Direct Investment (FDI) limit to 100%.

Rajeev Sehgal, president of the AIIEA’s northern zone insurance employees association, said a large number of private insurance companies with foreign partners have been operating in both the life and non-life insurance industry. He said that capital has never been a constraint for these companies to run their businesses. In fact, the total FDI in insurance is only around 32% of the capital employed. This being the case, it is irrational for the government to enhance the FDI limit to 100% and give total freedom to foreign capital to operate in India, he added.

“This decision will have serious consequences for not only the Indian economy but also the Indian insurance companies. There could also be hostile bids to take over the existing companies. Allowing total freedom and greater access to foreign capital could only retard the orderly growth of the insurance industry, with the focus more on profits rather than providing the people and businesses the much-needed security. It will have a disastrous impact on the interests of the marginalised sections of the Indian society,” he said in a statement.

“We strongly protest against the decision to hike the FDI limit in insurance and demand the withdrawal of this move. We will continue to mobilise public opinion against this move,” he said.