IRDAI (Governance)
IRDAI (Governance)
Why In News:
At its latest board meeting, the Insurance Regulatory and Development Authority of India (IRDAI) approved a fresh set of reforms covering investment norms, capital infusion, mergers, and policyholder protection.
Source: The Indian Express, Page 9, 30 July 2026 - 'IRDAI ushers in reforms to revamp insurance sector'; The Hindu, Page 13, 30 July 2026 - 'IRDAI okays reforms, policyholder fund norms, new general insurer'
About IRDAI
IRDAI is a statutory regulatory body constituted under the IRDA Act, 1999, headquartered in Hyderabad.
It regulates and promotes the insurance and re-insurance industry, deriving core powers from the Insurance Act, 1938.
IRDAI functions alongside RBI, SEBI, and PFRDA as one of India's key financial-sector regulators.
Key Reforms Announced
Liberalised investment norms and streamlined processes for capital infusion, restructuring, share transfers, and amalgamations of insurers.
Operationalisation of the Policyholders' Education and Protection Fund (PEPF) to strengthen grievance redressal and awareness.
The fund will be a dedicated institutional mechanism to promote insurance awareness and literacy initiatives, strengthen grievance redressal mechanisms and facilitate tracing and recovery of unclaimed insurance amounts.
Mandatory tagging of authorised salespersons to every insurance proposal and policy, to improve traceability across the distribution chain.
Key Facts for Prelims
Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Act, 2025: Notified 21 December 2025, effective 5 February 2026; enabled up to 100% FDI in Indian insurance companies and intermediaries, replacing the earlier 74% cap.
The Amendment Act enhanced IRDAI's enforcement powers, including ordering disgorgement of wrongful gains and imposing higher, proportionate penalties.
Bima Trinity: IRDAI's flagship initiatives - Bima Sugam , Bima Vistaar and Bima Vahak - support the goal of 'Insurance for All by 2047'.
Bima Sugam: A unified, non-profit digital platform enabling users to buy, renew, manage policies, and file claims across insurers in one place.
Bima Vistaar: A low-cost, bundled insurance product offering combined coverage for life, health, personal accidents, and property under a single policy.
Bima Vahak: A grassroots, women-focused distribution network aimed at expanding insurance awareness and access in rural and underserved areas.
Insurance Ombudsman mechanism offers policyholders a free, quasi-judicial grievance redressal route as an alternative to litigation.