Irdai proposes framework for regulation-making, public consultations

Draft norms seek to formalise stakeholder engagement, consultation processes and periodic review of insurance regulations

The Insurance Regulatory and Development Authority of India (Irdai) on Wednesday proposed a framework for making regulations and issuing subsidiary instructions under the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Act, 2025.

 

The draft regulation seeks to standardise the process for framing, amending and reviewing regulations, while codifying existing practices relating to stakeholder engagement, public consultation and publication of draft regulations.

 

Under the proposal, Irdai will be required to publish draft regulations on its website along with a statement of particulars detailing the statutory provisions invoked, regulatory intent and, where applicable, relevant global best practices.

 

The regulator has proposed a minimum 21-day period for public comments from insurers, intermediaries and other stakeholders.

 

 

Irdai will also be required to publish a general statement outlining its response to public comments by the date the regulations are notified. If the final regulation differs substantially from the draft for reasons other than stakeholder feedback received during consultation, the regulator will have to undertake a fresh round of public consultation.

 

The draft framework also enables Irdai to assess the expected costs and benefits of proposed regulations on policyholders, industry participants and the broader economy before finalising them.

 

Periodic review of regulations

 

Under the proposal, all insurance regulations will be reviewed once every three years from the date of publication unless an earlier review, amendment or repeal is considered necessary.

 

For issuing subsidiary instructions, Irdai has proposed constituting consultative committees comprising external experts from insurance, finance, law and information technology, along with industry representatives and officials of the regulator.

 

The recommendations of such committees will be advisory in nature and will not be binding on Irdai.

 

Provision for urgent action

 

The draft framework also allows the regulator to bypass the consultation process or the consultative committee route in cases requiring urgent regulatory intervention in the public interest, provided the reasons for doing so are recorded in writing.

 

The move follows the enactment of the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Act, 2025, which seeks to modernise the regulatory architecture of the insurance sector and strengthen transparency in policymaking.

 

Irdai has invited comments and suggestions from stakeholders on the draft framework till July 8, 2026.