IRDAI Strengthens Regulatory Framework for Motor Insurance Claim Settlement

• 17 Dec 2025
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The insurance sector regulator Insurance Regulatory and Development Authority of India (IRDAI) has taken various initiatives to protect the interests of policyholders. The initiatives require the insurers to adopt transparent, time-bound and fair claim-settlement processes. To prevent arbitrary or coercive practices during the motor claim settlement process, the IRDAI regulations form a primary legal instrument. 

According to the IRDAI Protection of Policyholders’ Interests, Operations and Allied Matters of Insurers Regulations 2024, all the insurers must have board-approved claim-settlement policies, disclose the roles, duties and appointment details of surveyors/loss assessors to the insured and guarantee that all claim deductions and settlements are transparent, reasonable and backed by documentary explanation.

As per IRDAI report, in FY 2023-2024, the percentage of complaints in the motor segment to total complaints was 26.18%. In FY 2024-2025, it has come down to 24.8%. Additionally, out of a total of 10,156 complaints that the Insurance Ombudsman received during FY2022-23, FY2023-24 and FY2024-25, under the motor insurance category, a total of 9,943 were disposed (awarded, withdrawn and non-entertainable). The remaining complaints are under process, at present.

According to the provision outlined in Master Circular on Protection of Policyholders' Interests 2024, in motor insurance, any loss amounting less than Rs. 50,000/- does not need to be mandatorily surveyed by a registered surveyor. For the same, the insurers are leveraging app based methodology with artificial intelligence driven assessment.

The IRDAI Insurance Surveyors and Loss Assessors Regulations 2015, require insurers to monitor the performance of surveyors and ensure they adhere to the prescribed code of conduct. Insurers must investigate any reported deviations that arise, conduct necessary inquiries and report any established violations to the Authority. Such cases are handled as per the regulatory framework.

The IRDAI has the authority to suspend a surveyor's license for various reasons like failure to fulfill the duties satisfactorily, violation of the code of conduct outlined in the regulations or behaving in a manner that is detrimental to interests of policyholders. Throughout the fiscal years 2022-23, 2023-24 and 2024-25, the IRDAI issued a total of 53 cautions and advisories to various surveyors in the industry as part of regulatory action taken on inspection observations.

The Minister of State, Ministry of Finance, Shri Pankaj Chaudhary, provided the above-stated information in a written response to a question in Rajya Sabha on 16 December 2025. 

Source: Press Information Bureau (PIB)