The Insurance Regulatory and Development Authority of India (IRDAI) on July 30, 2026, issued the Insurance Regulatory and Development Authority of India (Manner and Procedure for Imposing penalties) Regulations, 2026.
It shall come into force from July 30, 2026.
The following has been stated:
• The regulations specify the process for initiating proceedings based on inspections, investigations, audits, regulatory oversight, complaints, or recommendations of the adjudicating officer, while ensuring that officials involved in inspections or investigations are not part of the penalty proceedings. They also prescribe detailed procedures for issuing show cause notices, submission of replies, grant of personal hearings, service of notices, and ex-parte proceedings where necessary.
• The regulations further provide that IRDAI shall pass reasoned penalty orders after considering the nature, gravity, duration, repetition, policyholder impact, gains from the violation, and corrective actions taken by the noticee. In addition to monetary penalties, the Authority may issue advisories, cautions, directions, or warnings.
• Penalties shall be paid within 45 days, with the proceeds credited to the Policyholders' Education and Protection Fund.
• The regulations also provide for publication of penalty orders on the IRDAI website, an appeal mechanism before the Securities Appellate Tribunal (SAT) within 45 days, rectification of clerical errors, delegation of powers by IRDAI, and periodic review of the regulations every three years.
[Notification no. – IRDAI/Reg/11/225/2026]
