Key Details
The reforms approved by IRDAI seek to balance stronger consumer protection with greater operational flexibility for insurers, while supporting investment, innovation and regulatory certainty.
Key Area | Main Measures | Expected Impact |
Policyholder Protection | Notification of the Policyholders' Education and Protection Fund (PEPF) Regulations, 2026 | Strengthens insurance awareness, grievance redressal, recovery of unclaimed insurance amounts and technology-enabled policyholder services. |
Insurance Distribution Reforms | Mandatory tagging of authorised salespersons with every insurance proposal and policy | Improves accountability, traceability and transparency across insurance distribution. |
Ease of Doing Business | Liberalised investment norms, facilitative capital infusion framework, streamlined share transfer and amalgamation provisions, perpetual registration for intermediaries | Reduces compliance burden, supports capital formation and enhances operational flexibility. |
Regulatory Governance | IRDAI (Manner and Procedure for Imposition of Penalties) Regulations, 2026 | Introduces a transparent and uniform enforcement framework with structured procedures for regulatory action. |
Sector Growth | Registration of ProTec General Insurance Limited; implementation of 100% FDI reforms under SBSR Act | Fourth insurer registered in 2026; two insurers have already increased foreign shareholding beyond the earlier 74% limit. |
IRDAI Operationalises Key Reforms Under the SBSR Act
At its 137th Authority Meeting, IRDAI approved multiple regulatory amendments to implement the insurance law reforms introduced under the SBSR Act, 2025. The package combines policyholder-centric measures with reforms designed to improve governance, attract long-term investment and provide insurers with greater financial and operational flexibility.
The Authority also approved amendments covering actuarial, finance and investment functions, capital structure, transfer of shares and amalgamation of insurers, creating a more facilitative regulatory framework while retaining prudential safeguards.
Consumer Protection Receives Greater Institutional Focus
A major outcome of the meeting is the operationalisation of the Policyholders' Education and Protection Fund (PEPF) under the amended IRDA Act. The Fund will finance insurance literacy initiatives, strengthen grievance redressal systems, facilitate tracing of unclaimed insurance amounts and leverage digital technologies to improve policyholder services.
IRDAI has also introduced mandatory tagging of authorised salespersons with every insurance proposal and policy, strengthening accountability across the insurance distribution chain and improving transparency for consumers.
Regulatory Reforms Aim to Support Sector Expansion
Alongside consumer protection measures, IRDAI has simplified compliance through perpetual registration for intermediaries, streamlined corporate restructuring provisions and introduced a transparent framework for regulatory penalties.
The Authority also noted early progress in implementing the SBSR Act's investment reforms. Following the increase in the foreign investment limit to 100%, two insurers have already raised foreign shareholding beyond the previous 74% ceiling. Approval of a new general insurer further reflects growing investor interest and expanding capacity within India's insurance sector.
What Is the Policyholders' Education and Protection Fund (PEPF)?
The Policyholders' Education and Protection Fund (PEPF) is a statutory fund established under Section 16A of the IRDA Act, 1999, as amended by the SBSR Act, 2025. It supports insurance awareness, consumer education, grievance redressal, recovery of unclaimed insurance amounts and other initiatives aimed at strengthening policyholder protection.
Policy Relevance
Insurance reforms enter the implementation phase: IRDAI has operationalised major provisions of the SBSR Act through new regulations covering governance, capital, investment and policyholder protection.
Consumer-centric regulation is strengthened: The Policyholders' Education and Protection Fund (PEPF) and mandatory salesperson tagging improve transparency, accountability and access to grievance redressal while promoting insurance literacy.
Ease of doing business improves: Liberalised investment norms, perpetual registration and simplified corporate restructuring are expected to reduce compliance costs and facilitate capital formation.
Higher foreign investment may deepen insurance penetration: Early utilisation of the 100% FDI frameworksignals stronger investor confidence and could expand insurance capacity and product innovation.
Balanced regulation remains essential: Sustaining growth will require maintaining prudential oversight while enabling innovation, competition and wider insurance access
Follow the Full News Here: IRDAI advances implementation of SBSR Act Reforms, strengthens Policyholder Protection and approves New General Insurer in its 137th Authority Meeting