New Delhi, Dec. 12 -- The government has paved the way for 100% foreign direct investment in the insurance sector, composite licences and easier capital requirements, among other sweeping reforms, as the Union Cabinet cleared the enabling legislation, said two officials aware of the matter.

The Insurance Laws (Amendment) Bill is expected to be introduced in both houses of Parliament next week, the first of the two officials quoted above said.

The bill allows a differential licensing regime to support micro-insurers serving low-income and rural populations and paves the way for captive insurers - allowing conglomerates to establish in-house insurers to manage group-level risks, according to both the people quoted earlier, who spoke on th...