The Insurance Regulatory and Development Authority of India (IRDAI) has established a working group focused on artificial intelligence (AI) to assist regulated entities within the insurance sector in the adoption, governance and oversight of AI technologies.
Chaired by Prof. Sandeep K. Shukla, Director of IIIT Hyderabad, the working group will provide guidance on governance frameworks, best practices and safeguards. Its goal is to ensure that innovation in the insurance sector is pursued in a manner that is fair, transparent, resilient and protective of policyholders’ data at all times.
Recently, rapid advancements in emerging technologies like AI have begun to remold the cybersecurity threat environment. These technologies are being increasingly adopted within insurance sector and may present new challenges for regulated entities.
The IRDAI circular said, ”In order to ensure that the industry is adequately prepared to harness these technologies responsibly and safeguard the interests of policyholders, it is essential to study their impact on the insurance ecosystem, as they also introduce new dimensions of ethical, operational and cybersecurity risks.”
In addition, the circular released by the insurance regulator proposes the issuance of IRDAI (Procedure for Making Regulations and Subsidiary Instructions) Regulations, 2026 in light of the framework established under Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Act, 2025.
IRDAI has released an exposure draft that proposes changes to the principles underlying regulatory decision-making. The proposed regulations outline broad principles to consider when developing regulations. These include implementing a public consultation framework, establishing a framework for economic analysis and empowering the authority to conduct proposed regulations’ thorough analysis.
This analysis will assess costs as well as benefits in relation to the authority's statutory objectives. What’s more, the proposed regulations mandate consultation with the Insurance Advisory Committee as stipulated in the IRDA Act of 1999. They also authorize the authority to create additional consultation mechanisms that integrate relevant expertise when evaluating regulatory proposals as indicated in the circular.
Source: Business Line
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