IRDAI Regulations, 2024- India

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As per the Economic Survey, 2021, insurance penetration in India stands at a mere 4.2%, reflecting a low level of coverage within the population.
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As per the Economic Survey, 2021, insurance penetration in India stands at a mere 4.2%, reflecting a low level of coverage within the population.1 However, this figure underscores a promising landscape for potential growth and expansion within the insurance sector in the country. With a goal to ensure "Insurance for All by 2047"2, the Insurance Regulatory and Development Authority of India (IRDAI) has recently introduced the Insurance Regulatory and Development Authority of India (Protection of Policyholders' Interests, Operations and Allied Matters of Insurers) Regulations, 2024 (hereinafter referred to as the guidelines)3 and which came into force on April 1st, 2024. These guidelines aim to protect the interest of the policyholders, to ensure that the conduct of the insurer and distribution channel are not prejudicial to the interest of the policyholder. It is a significant step in ensuring the transparency and fairness in the insurance sector. This article delves into the key highlights of the recent regulations.

Key Highlights of the IRDAI Regulations:

The recent guidelines introduced by the IRDAI, bring several key highlights aimed at enhancing transparency and protecting the interest of policyholders in the insurance sector such as:

  1. Insurance Products: As per Rule 6, it is the obligation of the insurer to ensure that both the policyholders and potential policyholders have fair and inclusive access to insurance products and services, whether through direct channels or distribution networks.
  2. Insurance Products Prospectus: As per Rule 9, every insurer shall develop and maintain a prospectus which shall contain the information of every retail insurance product including the features, benefits, risks, grievance redressal mechanism etc.
  3. Issuance of Insurance Policy in Electronic Form: As per Rule 13, insurance policies that meet defined criteria will be issued electronically, promoting efficiency and accessibility for policyholders.
  4. Nomination requirements: As per Rule 18, to ensure thorough coverage, every life insurance policy must include a nomination. The insurer shall provide a facility to the policyholder for changing their nominees. Additionally, the insurer while issuing the general and health insurance shall obtain the nomination at time of issuance of new policies and at the time of renewal of policy.
  5. Free Look Period: As per Rule 20, every policyholder will now have a free look period[4] of 30 days starting from the date of receipt of policy document, regardless of how they are acquired. The policyholder reserves the right to cancel the policy during the free look period and the insurer shall refund the premium within 7 days from the date of receipt of this request.
  6. Settlement of claims: As per Rule 22, every insurer or the distribution channel shall ensure that they provide:

(a) Necessary support and guidance for registering claim,

(b) Necessary specific documents which are required to support the claim,

(c) Procedure to be followed for settlement of claims.

  1. Grievance Redressal Mechanism: As per Rule 25, every insurer shall establish a system and a procedure for receiving, registering and disposing of grievances and shall publish such procedure on their concerned website. Additionally, the insurer shall also publish the availability of option to the complainant for taking up grievance with Insurance Ombudsman, if their grievances are not resolved to their satisfaction.
  2. Advertisement Requirements: As per Rule 27, insurers are no longer required to submit the advertisements to the authority, thereby reducing their administrative burden. However, the insurer should ensure that the information provided in the advertisement is fair and true and shall also reflect the potential risks with the products so offered. It shall also reflect the registered name of the insurer along with its trade name, monogram etc. No advertisement shall make any claims whereby it:

(a) Impacts the potential customer's ability to recognize and understand the advantages of insurance products,

(b) Makes promises that are beyond what the policy can reasonably deliver,

(c) Fails to disclose important conditions of the policy,

(d) Contains any false or fabricated facts, figures and features.

  1. Opening places of business within India: As per Rule 30, Insurers that meet the following criteria are permitted to open the business within India without obtaining the prior approval of the authority. The regulations have provided different criteria for the insurer who have completed five years of operation and the insurers that have not completed five years of operation.

A: Insurer that have completed five years of operations:

(1) Minimum control level of solvency in the preceding three financial years.

(2) Expenses of Management are within the limits specified under the Regulations on Expenses of Management in the preceding Financial Year.

B: Insurers that have not completed five years of operations:

(1) Minimum control level of solvency to be maintained.

(2) As proposed in the business plan submitted in IRDAI/R1 and IRDAI/R2 applications5 and/or has received forbearance under the Expenses of Management Regulations within the first five years of commencement of its operations.

If the insurer do not fulfill the above mentioned criteria, then they are required to obtain the approval from the Competent Authority and shall open the business within one year from the date of approval.

  1. Requirements for Foreign Branch or at International Financial Services Centers (IFSC): As per Rule 38, insurer willing to setup foreign branch or office at IFSC shall comply with the following norms:

(i) They have been in operation for at least 3 years.

(ii) They have been compliant with the control level of solvency, have Profits after Tax, track record etc.

Impact of the Guidelines:

These guidelines marks a significant milestone in the insurance sector and they are poised to have a profound impact on insurers, policyholders and the industry such as:

  1. Empowerment through Information: Providing comprehensive information about insurance products will empower customers to make informed choices that align with their needs and financial circumstances. This could lead to better decision making and increased satisfaction with purchased policies.
  2. Enhanced Transparency through Website Publication: Ensuring transparent publication of insurance products and updates on insurer websites foster consumer trust, facilitates informed decision making and promotes regulatory compliance.
  3. Enhanced Policyholder Protection through Nomination Requirements: Requiring nominations for all life insurance policies and introducing nomination requirement for general and health insurance policies ensure comprehensive coverage and safeguards the interest of policyholders, thereby enhancing their protection.
  4. Extended Free Look Period for Policyholder: Uniformly, setting the free look period at 30 days from the receipt of policy document, irrespective of the acquisition mode, allows policyholders adequate time to review politics thoroughly, facilitating informed decision making.
  5. Enhanced Grievance Redressal System: Mandating insurers to establish a comprehensive grievance redressal system, highlighting the option to approach insurance ombudsman further empowers policyholders, promoting transparency and accountability in the insurance sector.
  6. Streamlining the Expansion Opportunities for Insurers: By removing the requirement to obtain prior approval for opening insurance business which meet the specified criteria's and by enabling the strong financially standing insurers to establish foreign branches, including offices at IFSC, facilitates streamlined expansion opportunities and competitiveness in the insurance sector.


In conclusion, the IRDAI (Protection of Policyholder's Interests, Operations, and Allied Matter of Insurers) Regulations, 2024, present a new era of enhanced policyholder protection, streamlined operation and increasing transparency in the insurance sector. The introduction of an extended free lock period, nomination requirements for comprehensive coverage and issuance of insurance policies through electronic mode, all contribute to empowering policyholders and promoting informed decision makings. Furthermore, the streamlined operations for insurer, including the elimination of advertisement filling, simplified business opening procedures and removal of outsourcing reporting requirements, not only reduce administrative burden but also foster efficiency and competitiveness. Collectively, these regulations signify a proactive approach by regulatory authorities to adapt to the evolving industry dynamics and protecting the interest of the policyholders and insurers alike.

Ritvik Kashyap, Intern at S.S. Rana & Co. has assisted in the research of this article.


1 Available at:


3 Available at: 8bc0de5-222f-ba8d-60d3-1a2181bb41c7?version=1.0&t=1707890704901&download=true

4 It is a safeguard clause built-in for policyholder, which allows them to cancel the insurance policy without paying the surrender charges.

5 To obtain the certificate of Registration as an Indian Insurance Company, the applicant has to file R1 and R2 applications with the IRDAI. Related Posts Standard Form of Insurance Contracts and Consumer Rights- India

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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