December 17, 2025
SaketGokhale’s speech on The Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill, 2025
Thank you, Mr. Vice-Chairman for the opportunity. It is really interesting; I start speaking and the Finance Minister is leaving. This might be a little difficult for her, but that is understandable. Sir, I want to begin by thanking my leaders, Ms. Mamata Banerjee and Shri Abhishek Banerjee, for giving me a chance today to speak on behalf of my party, All India Trinamool Congress, on the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill, 2025. We have to work on the naming system of the Bill. Sir, insurance is a subject that can have a very serious effect on the lives of people. In most cases, comprehensive insurance is sometimes the only thing standing and protecting people, which can save them from bankruptcy in matters of accident, in matters of illness or even in matters of death. So, how does insurance work actually? People pay premiums for insurance cover. The insurance company invests those premiums into safe, credit-worthy instruments. This allows the insurance company to give a payout when a claim is raised, as well as earn profits, which is the right of every business. No one disputes that. But how is insurance different from other investment instruments like mutual funds or savings schemes? The difference is that insurance is not just an investment scheme for getting returns. Insurance must primarily be seen as a social security scheme where insurance companies carry a fiduciary responsibility. To whom, Sir? They carry a fiduciary responsibility to the policyholders and not to the shareholders. Sadly, this Bill does not see it this way. This Bill only strengthens capital while it weakens accountability and leaves policyholders exposed. A lot has been spoken about this Bill in the Lok Sabha for the last couple of days. I am not going to waste the time of this House by repeating what a lot of esteemed Members have said in the Lok Sabha on the Bill. But yesterday, the hon. Finance Minister, who left just as I started speaking, spoke for 45 minutes while replying to the debate on this Bill in the Lok Sabha. Therefore, today, I wish to address some of the claims made by the hon. Finance Minister in her reply, a lot of which were completely untrue. The Finance Minister said, I quote, “The Insurance Act has been amended 12 times since 1938 to reflect changing times. Agent commissions were reduced even in 1950. So, current changes are just part of natural progress.” Sir, comparing amendments from 1950, when we lived in a completely nationalised and protectionist economy, is very different to today’s era. It is a wrong comparison. Past amendments were incremental and protected national interest. The 1968 commission reduction was a domestic reform. It was not a scheme for surrendering to foreign capital. The Finance Minister also conveniently ignores the nationalisation of life insurance in 1956 and general insurance in 1972. Why was this nationalisation done, Sir? That was done because the private players failed to serve the economy. That is why we nationalised in the first place. Therefore, reducing commissions of agents, which they are trying to do through this Bill, was done in 1968 to achieve efficiency before nationalisation. It was a one-time measure. This Bill does the opposite by opening the door to profit extraction by foreign entities. The Finance Minister said that our Government has launched numerous insurance schemes to bring everyone under insurance coverage. Then she named some of them like Fasal Bima Yojana, etc. My question is: If the Government-backed schemes, where the premium is minimum, are successfully expanding insurance coverage, then, why do we need 100 per cent FDI? It is very strange that the Finance Minister is bringing a Bill which contradicts our own Government’s claim that we are expanding insurance coverage to rural areas across India. If you are doing it, then, why do you need 100 per cent FDI? The reality is that Government insurance schemes are run through LIC and PSU insurers. Private and foreign insurance companies are not interested in the low premium, but high-risk market which a lot of rural India is. This Bill, actually, dilutes the mission of providing comprehensive insurance coverage to a large section of the population. The Finance Minister very proudly said that Rs.14,350 crore have been infused into the three general insurance companies which are PSUs. She also said that LIC, GIC Reinsurance and AICIL have reported the highest ever profits last year. The claims of capital infusion by the Government need a reality check. Why was capital infusion done in insurance companies? It was done because these companies are not able to compete with the MNCs right now. I have a simple question. If these public sector insurance companies, as the Finance Minister said, need capital infusion of Rs.14,350 crore just to survive, then, let me give you a comparison of foreign insurers to see what their size is. Allianz has Assets Under Management of 150 billion euros; AXA has 750 billion euros; and Prudential has 1.7 trillion dollars. So how are our companies that need market capital infusion going to compete with these huge players? The reality is that LIC’s profits today come from its 65 per cent plus market share, which has been built over decades. When this Bill opens up insurance to 100 per cent FDI, foreign players will enter the market with predatory pricing and LIC’s profits will vanish. So, the Finance Minister’s claim is also selective. What she failed to mention was that the three PSU general insurers, National, Oriental and United India, lost Rs.26,000 crore between 2016 and 2021. That said, Sir, this capital infusion was not some sort of benevolence by the Government. This was done to keep these companies on life support, so that they don’t collapse. It did not make them competitive. The Finance Minister said that FDI limit in insurance was increased from 26 per cent in 1999 to 49 per cent in 2015 to 74 per cent in 2021; so, now we are making it 100 per cent. Let me place some hard facts which the Finance Minister forgot to mention. When FDI in insurance was raised to 26 per cent in 2001, insurance penetration in the country was 2.7 per cent. When FDI was increased to 49 per cent in 2015, insurance penetration went up to only 3.4 per cent. When FDI was raised to 74 per cent in 2021, insurance penetration was only 4.2 per cent. Now what happened this year just before this Bill was brought in? Insurance penetration this year has fallen to 3.7 per cent. The simple question is: If increasing FDI from 26 per cent to 74 per cent could not prevent insurance penetration from falling, then, how is this 100 per cent FDI going to help? Then, the Finance Minister said that through this Bill, money collected by foreign insurance companies as reinsurance premiums will be retained in India. Again, the Finance Minister provided only half the facts. While this Bill does require premiums to be retained in India, it does not have the same requirement for profits. Yes, premiums will be retained in India, but not the profits of companies. Therefore, a foreign insurance company can take away 100 per cent of the profits earned in India to other countries. Beyond that, dividend payments, management fee, brand royalties, technical service charges, etc., all of these extract value. But they don’t have to keep that money in India. They can repatriate it to other countries if they want. Sir, very simply, based on what the Finance Minister said in the Lok Sabha, as I showed right now, she conveniently misrepresented. When the Finance Minister replies today, I want her to respond to five very specific questions. Sir, Question No. one is: What specific commitment will the Government demand from foreign insurers on increasing rural penetration in India? These are companies that do not want to deal with the low premium rural market. So, what commitments are you going to take from them that they will serve markets beyond urban India? Second, how will repatriation of profits by foreign insurance companies be monitored and kept limited? This is East India Company Part-2. So, how are you going to monitor and stop that? Third one is very important because I have two of my colleagues in my party, who represent our trade union; they are labour leaders. So, what will happen to the jobs of lakhs of PSU insurance employees if the market share of these companies declines due to the predatory pricing by foreign companies? Number four, how will premiums be regulated through this Bill to protect consumers from arbitrary and sudden hikes in premium cost by foreign insurers? They will come in to capture the market; they will start offering low premiums, discounts and then, as we have seen with a lot of private insurance companies, premiums are suddenly hiked year-on-year. What will this Bill do? This Bill doesn’t do anything. How is the Government going to ensure that there is some regulation of premium prices? And fifth one is very important because we all care about LIC and we all care about the PSU insurers. Will the Government present a White Paper on what the impact of this Bill on the market share of LIC and PSU insurers is going to be. Sir, as I said in my opening remarks, insurance can be a matter of life and death for common people. * So, this Bill is something that affects lives; it affects people even in death. This required a better discussion; this required better consultation. Therefore, in conclusion, on behalf of my Party, I would like to state that this Bill should be referred to Standing Committee for detailed examination. Jai Hind! Vande Mataram! Jai Bangla!
