Ajay Seth takes charge as IRDAI chairman amid key sector reforms
Ajay Seth officially assumed charge as the Chairman of the Insurance Regulatory and Development Authority of India (IRDAI) on September 1, 2025. A 1987-batch IAS officer from the Karnataka cadre, Seth was appointed by the Appointments Committee of the Cabinet on July 24, 2025, for a tenure of three years or until he turns 65, whichever is earlier.
Seth previously served as Secretary of the Department of Economic Affairs. He succeeds Debasish Panda, whose three-year term ended in March. The appointment comes at a crucial time as the insurance industry is navigating significant regulatory changes and preparing to meet the ambitious “Insurance for All by 2047” target.
At IRDAI, Seth will oversee the rollout of major initiatives like the risk-based capital and supervision frameworks, implementation of IFRS standards, and the launch of Bima Sugam. He will also be involved in shaping the future of FDI norms through the pending Insurance Amendment Bill, 2025.
Bima Sugam portal launched to revolutionize digital insurance access
The Insurance Regulatory and Development Authority of India (IRDAI) has officially launched the much-anticipated Bima Sugam portal, marking a significant leap in India’s digital insurance transformation. Designed as a one-stop platform, Bima Sugam will allow users to buy, renew, and settle insurance policies across life, health, motor, and general insurance segments—cutting down paperwork and middlemen.
The platform will also help policyholders access claim history, policy details, and service records digitally. IRDAI aims to integrate insurers, intermediaries, and policyholders under a unified system, promoting transparency, efficiency, and trust.
The initiative aligns with the government’s larger vision of “Insurance for All by 2047.” With Aadhaar-based onboarding, e-KYC, and real-time claims processing, Bima Sugam is expected to reduce frauds, cut costs, and accelerate insurance penetration, especially in rural areas. The platform is currently in its initial rollout phase and will be scaled up in stages.
Insurers to conduct second impact study on risk-based capital norms
IRDAI has asked insurers to undertake a second Quantitative Impact Study (QIS 2) before implementing the proposed Risk-Based Capital (RBC) framework, signalling a cautious and consultative approach to regulatory reform. The RBC framework aims to align India’s solvency regime with global standards by linking capital requirements to the specific risks faced by insurers—such as investment, underwriting, operational, and market risks.
The new framework replaces the existing fixed-solvency margin model and is seen as crucial to strengthening policyholder protection and industry resilience. The data for QIS 2 must be based on actuarial valuations as of March 31, 2025, and IRDAI has provided insurers with detailed technical guidelines.
Industry leaders acknowledge that this may push implementation to next year. A recent IMF-World Bank report praised India’s progress on RBC as part of its broader financial sector reform efforts under the FSAP.
IRDAI mulls mutual fund-style commission cap to curb high payouts
The Insurance Regulatory and Development Authority of India (IRDAI) is reportedly exploring a mutual fund-style cap on insurance commissions to rein in excessive payouts to distributors. Sources indicate that the regulator is reviewing the possibility of introducing uniform commission limits, similar to what is followed in the mutual fund industry, where commission payouts are capped to protect investor interests and promote transparency.
The move comes amid rising concerns about high upfront commissions, particularly in life and health insurance segments, which may sometimes lead to mis-selling. Currently, insurers enjoy flexibility under the Expenses of Management (EOM) framework, which replaced rigid commission caps. However, IRDAI is now considering whether a recalibration is needed to ensure customer-first practices.
Industry players are expected to be consulted, and any proposed cap will aim to balance distributor incentives with consumer protection, while ensuring long-term sectoral growth.
IRDAI official arrested for Rs. 5.3 crore embezzlement
An Assistant Manager at IRDAI, Bhaskarabhatla Suryanarayana Sastry, has been arrested for allegedly embezzling Rs. 5.3 crore through forged invoices and manipulated financial documents. Employed in the general administration department, Sastry reportedly created fake office notes and quotations, submitting fraudulent payment files with his and his family’s bank account details in place of legitimate vendors.
The payments were processed after receiving approvals from higher officials, who were unaware of the deception. According to the FIR filed, Sastry’s premeditated actions went undetected for a prolonged period, resulting in significant financial losses for the regulatory body.
The case raises questions over IRDAI’s internal checks and balances. Law enforcement authorities have charged the accused under sections related to cheating, forgery, and criminal breach of trust. An internal investigation into the lapses in financial oversight is likely to follow.
Draft FDI norms may ease compliance burden in insurance sector
The government has released draft amendments to the Indian Insurance Companies (Foreign Investment) Rules, 2015, aimed at easing compliance for foreign investors. The proposed changes remove the requirement that a majority of directors and key management personnel (KMPs) must be resident Indian citizens, a condition seen as restrictive by global insurers.
However, the draft retains the stipulation that at least one among the CEO, MD, or chairperson must be a resident Indian. Other clauses requiring 50% of the board to be independent directors and maintaining strong financial metrics for foreign-owned insurers still apply if foreign investment exceeds 49%.
Legal experts say these changes could improve India’s attractiveness as an investment destination without compromising governance. While the 2021 hike in FDI cap to 74% didn’t bring major inflows due to compliance concerns, the current move may provide global insurers greater flexibility and operational clarity.
IRDAI mulls mutual fund-style commission cap to rein in high insurance payouts
The Insurance Regulatory and Development Authority of India (IRDAI) is considering implementing a mutual fund–style cap on insurance commissions to address the issue of disproportionately high payouts to intermediaries, sources told CNBC-TV18. This move aims to align insurance distribution costs with investor protection norms followed in other financial sectors.
Currently, some insurers offer commissions as high as 40%, especially in low-ticket-size policies, raising concerns about product mis-selling and affordability. A cap similar to that in the mutual fund industry—where upfront and trail commissions are regulated—may ensure more transparency and fair pricing for consumers.
IRDAI had liberalized commission norms in April 2023 under a “total expense” ceiling, but concerns remain around lack of standardization and scope for excessive distributor incentives. The proposed cap is likely to be discussed with stakeholders before formal guidelines are issued.
