IRDAI Approves New Insurance Intermediary Rules

• 01 Aug 2026
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The Insurance Regulatory and Development Authority of India (IRDAI), which is India’s insurance industry regulator, has approved a set of reforms that are expected to make insurance selling more transparent, improve the accountability of insurance distributors and strengthen protection for policyholders. The Authority approved these reforms during its 137th Authority Meeting as part of the implementation of the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Act, 2025 

Some of the changes are aimed at promoting ease of doing business for the insurers and intermediaries but most of the measures are directly targeted at policyholders with a focus on transparency, grievance redressal and accountability in the insurance ecosystem. 

Insurance Policy to Be Linked to Salesperson

For the policyholders, one of the biggest changes is that every insurance proposal, policy and certificate must now be linked to the authorised salesperson who sold it. This requirement has been brought in by the IRDAI to enhance accountability, transparency and regulatory oversight in the whole process of distribution of insurance.

To put it simply, every policy will have a clear record of the person who sold it. If the customer later complains of mis-selling, wrong advice or failure to disclose key policy terms, insurers as well as regulators can quickly identify exact salesperson responsible for this. This move is expected to make sales process more transparent and increase accountability among agents, brokers and other intermediaries. 

New Fund to Protect Policyholders and Recover Unclaimed Insurance Money

The insurance regulator has also approved the IRDAI (Policyholders’ Education and Protection Fund) Regulations, 2026. These regulations will operationalize the Policyholders’ Education and Protection Fund (PEPF). 

The PEPF will promote awareness about insurance, strengthen redressal of grievances, use technology to improve services to policy holders and help trace and return unclaimed insurance money to rightful beneficiaries. 

Stronger Accountability for Insurance Intermediaries

IRDAI has strengthened governance and disclosure requirements for insurance intermediaries so as to improve accountability as well as align regulations with Sabka Bima Sabki Raksha Act and Foreign Investment Rules.

Although these changes mainly apply to intermediaries, better disclosure standards are expected to make insurance products more transparent for customers. IRDAI also expects simpler compliance rules to help intermediaries, TPAs and surveyors focus more on serving their policyholders.

Perpetual Registration to Cut Red Tape

Now, the insurance intermediaries don’t need to renew IRDAI registration periodically anymore. They will operate under a perpetual registration system. With that being said, they will still need to pay an annual fee to the insurance regulator. 

According to the authority, this will reduce the compliance requirements and administrative work and allow the intermediaries to spend more time on serving their customers.

New Penalty Framework for Fairer Enforcement

IRDAI has given the greenlight to the IRDAI (Manner and Procedure for Imposition of Penalties) Regulations, 2026. Under the new framework, there is a transparent and consistent procedure for regulatory action. 

This includes issuing show-cause notices and passing reasoned orders. While these rules are mainly applicable to the regulated entities, they are anticipated to improve the regulatory discipline as well as strengthen public confidence in insurance sector. 

Other IRDAI Reforms

The Authority also approved amendments to regulations concerning insurers' actuarial, finance and investment functions as well as rules on registration, capital structure, transfer of shares and amalgamations. The reforms give insurers more operational and financial flexibility while strengthening financial governance and supporting the long-term growth of the sector.

The regulator also granted a licence to ProTec General Insurance Limited, the fourth insurer to be approved in 2026. It said two insurers have already increased foreign shareholding above earlier 74 per cent cap following introduction of 100 per cent FDI under the Sabka Bima Sabki Raksha Act. 

Source: India Today