IRDAI Regulatory Primer

Key decisions

1. Q1

   What exactly does IRDAI regulate — and what does it NOT?

   REGULATES: (1) Insurer licensing + capital requirements (₹100Cr minimum paid-up capital for life/general insurers; ₹200Cr for reinsurance). (2) Product approval — every new insurance product needs File-and-Use approval. (3) Premium pricing methodology (insurers set rates, but actuarial basis is reviewable). (4) Distribution channels (agents/brokers/bancassurance licensing via IRDAI). (5) Solvency margins (min 150%). (6) Claim settlement timelines + grievance redressal. (7) Investor protection (max 50% equity in life-fund investments, etc.). DOES NOT REGULATE: foreign insurance bought abroad (eg US health while NRI), captive insurance for own-business risk, or social-security schemes managed by EPFO/ESIC/PMJJBY (govt-administered, IRDAI advisory only). Tax treatment is CBDT (not IRDAI) — eg 80C / 80D deductions.

2. Q2

   What is the IRDAI Ombudsman and when should I use it?

   Insurance Ombudsman = quasi-judicial body for resolving complaints up to ₹50L (raised from ₹30L in 2023). 17 ombudsman offices across India (Mumbai, Delhi, Kolkata, Chennai, Bengaluru, etc. — find yours at cioins.co.in). WHEN TO USE: (a) Insurer rejected claim and you have given them 30 days to respond. (b) Insurer's grievance officer has not resolved in 30 days. (c) You disagree with the resolution. Process: file Form P-II (downloadable), free of cost, no lawyer needed. Insurer must comply with Ombudsman award within 30 days. 60-70% of complaints get resolved in favour of policyholder. ABOVE ₹50L: file directly in Consumer Forum (District/State/National). For policy fraud or insurer misconduct: complaint to IRDAI Bima Bharosa portal (formerly IGMS).

3. Q3

   What are the mandatory IRDAI standard policies?

   IRDAI has standardized 8 baseline products since 2020 — every insurer MUST offer these with IDENTICAL terms (only price varies): (1) Arogya Sanjeevani (standard health, ₹1L-₹5L). (2) Corona Kavach (Covid-specific, 3.5-9.5 months). (3) Corona Rakshak (Covid lump-sum). (4) Saral Jeevan Bima (standard term life, age 18-65, ₹5L-₹25L). (5) Saral Pension (standard annuity). (6) Bharat Griha Raksha (standard home, raised to ₹10L coverage 2023). (7) Bharat Laghu Udyam Suraksha (small business). (8) Bharat Sookshma Udyam Suraksha (micro-enterprises). Standard product BENEFIT: easy to compare across insurers (same wording, same exclusions). LIMITATION: lower coverage limits + fewer features than insurer's flagship plans. Use standard products as a baseline; layer with custom plans if budget allows.

4. Q4

   How does the IRDAI File-and-Use system work?

   Pre-2022: every insurance product needed IRDAI prior approval before launch (slow — 6-18 months). Post-2022 'Use-and-File': insurers can file the product with IRDAI and launch immediately for most categories (health, term, motor); approval review happens within 30 days. This sped up product innovation 10x. Products STILL needing prior approval: variable life, ULIPs with new guarantees, group annuities, reinsurance treaties above $50M. CONSUMER ANGLE: more product choice now (700+ health plans vs 150 in 2020), but also more 'wow-feature' marketing — IRDAI standard products give an honest baseline. Filed products are listed at irdai.gov.in (search 'UIN' — every product has a unique IRDAI Identification Number printed on policy schedule).

5. Q5

   What recent IRDAI 2023-26 reforms affect me as a buyer?

   MAJOR REFORMS LAST 24 MONTHS: (1) Ombudsman limit raised ₹30L → ₹50L (Nov 2023). (2) Cashless Everywhere — IRDAI mandated all health insurers offer cashless at non-network from Feb 2024 (insurer pays directly to any hospital, not just network — implementation varies). (3) Bima Sugam — single IRDAI-run marketplace for all insurance buying/servicing (launched 2024, scaling 2025-26). (4) Bima Vahak — village-level women insurance agents (rural penetration push). (5) Bima Vistaar — affordable composite insurance product (term + health + accident + property in one). (6) State Insurance Plan — each state must designate one insurer as lead for rural penetration. (7) Surety bonds + Title insurance approved (real-estate sector). (8) Risk-based capital framework planned for 2026-27 (replaces fixed solvency margin). NET EFFECT: lower friction to buy, faster claims, more inclusion-focused products.

Top insurers ranked by claim settlement

• IRDAI (regulator):Not an insurer; the statutory authority that licenses + supervises all insurers. irdai.gov.in
• Bima Bharosa (IRDAI grievance portal):Formerly IGMS. File complaints against insurers at bimabharosa.irdai.gov.in
• Insurance Ombudsman:Quasi-judicial body for ₹50L claims. cioins.co.in — find your zonal office.
• Bima Sugam:IRDAI-run marketplace for buying + servicing all insurance. Scaling 2025-26.
• LIC:Largest by AUM (₹50L Cr+) and policy count. State-backed (govt held 96.5% till 2022 IPO; ~96% post-IPO).