Policyholders' views needed to make rules: Irdai Chariman Ajay Seth

Irdai Chairman Ajay Seth said the regulatory process must integrate policyholders' expectations and strengthen coordination among regulators to address overlaps and systemic financial risks

Insurance policyholders’ opinion must be considered when regulations are being made for the sector, said Ajay Seth, chairman of the Insurance Regulatory and Development Authority of India, on Friday.

 

“A significant regulatory gap from the insurance sector's perspective is the voice of the public at the stage of regulation-making,” he said at a conference called ‘Gatekeepers of Governance’ in Mumbai. “While views of the insurance industry get well-articulated, we need to find ways to bring in expectations of policyholders, both current and potential, in a more structured and extensive manner.”

 

He highlighted another concern —unregulated health service providers — as an area requiring focus.

 

Seth said inter-regulatory coordination aims to deal with overlaps and gaps, ensure financial stability, promote financial system development, and support financial literacy and inclusion. As the financial sector is digitalised, framing regulations for one sector may lead to gaps and overlaps that require a close inter-regulatory coordination.

 

According to Seth, the interlinking of various segments of the financial sector, both domestically and globally, may result in financial instability in other segments or the overall industry. The International Monetary Fund and the World Bank’s ‘Financial Stability Assessment Report’ for 2025 said that India has advanced cybersecurity risk oversight, especially for banks, but it recommended extensive crisis simulation and stress tests for banks.

 

Key examples of interlinked financial sector challenges could be found in the efforts of public authorities to formulate coordinated strategies for strengthening cyber security in the financial sector and climate risk resilience.

 

Seth said that regulators and the government should work together in developing a comprehensive and consistent framework to identify, assess, and monitor systemic climatic financial risk and adaptation measures. He added that inter-regulatory coordination is reflected in financial products such as exchange-traded currency derivatives, which ensures alignment in policy, risk management, eligibility criteria, and market surveillance.

 

He said that a meeting of the Financial Stability and Development Council in June “considered strengthening the cyber resilience framework of the Indian financial sector through a financial sector-specific cyber security strategy, and currently the work is on and we expect, in the early part of the next calendar year the draft strategy should be with us.”