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IRDAI Unveils Key Reforms to Modernize Insurance Oversight

by Celia

The Insurance Regulatory and Development Authority of India (IRDAI) has announced the introduction of five new regulations and amendments to enhance the country’s insurance regulatory framework. These reforms are designed to foster innovation, improve operational efficiency, and ensure robust policyholder protection.

A major update is the revision of the Regulatory Sandbox framework, which now aims to promote greater adaptability and innovation within the industry. This updated framework is principle-based, with detailed operational guidelines set to be outlined in a forthcoming master circular. In a significant development, the scope of the sandbox has been expanded to include proposals that not only enhance innovation but also improve operational efficiency. For the first time, the updated framework permits Inter-Regulatory Sandbox proposals, enabling collaboration across multiple financial sectors.

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In addition, the IRDAI has consolidated three existing regulations into the newly introduced IRDAI (Maintenance of Information by the Regulated Entities and Sharing of Information by the Authority) Regulations, 2025. This consolidation mandates that all regulated entities maintain electronic records with stringent security and privacy protocols. Entities are now required to implement data governance frameworks that are approved by their respective boards. Furthermore, the regulations stipulate that all data must be stored in India-based data centres, ensuring greater control over sensitive information. Clear guidelines for the sharing of confidential information have also been established.

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The IRDAI has also amended regulations concerning the Insurance Advisory Committee and the Re-Insurance Advisory Committee, with changes aimed at enhancing governance, improving operational flexibility, and aligning with the broader objectives of creating a modern and efficient regulatory framework.

These updates reflect the IRDAI’s ongoing commitment to fostering a dynamic regulatory environment that supports sustainable growth and continuous improvements within India’s insurance sector. Through these reforms, the IRDAI seeks to bolster the industry’s resilience while ensuring robust protection for policyholders in an evolving market.

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