Every insurance policy to carry seller’s name, mandates IRDAI; clears policyholder protection fund, new penalty rules
IRDAI has cleared the Policyholders’ Education and Protection Fund, a uniform penalty framework, and registration for ProTec General Insurance — the fourth new insurer of 2026 — as SBSR Act reforms continue rolling out.
IRDAI clears the Policyholders' Education and Protection Fund, a uniform penalty framework, and registration for the fourth new insurer of 2026
New Delhi –IRDAI: Every insurance proposal, policy and certificate of insurance will now have to carry the details of the authorised sales person who sold it, under new rules cleared by the Insurance Regulatory and Development Authority of India at its 137th Authority Meeting in Hyderabad. The mandatory tagging is meant to make it easier for a customer to trace who advised them and hold that person accountable, and comes as part of a wider set of reforms tied to the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Act, 2025.
Also Read: How to Lower Car Insurance Premium in India: 5 Proven Ways to Cut Costs
The tagging rule was approved alongside a broader overhaul of norms for insurance intermediaries. Agents, third-party administrators and surveyors will now get perpetual registration backed by an annual fee, doing away with the earlier cycle of periodic renewals — a change IRDAI says will let intermediaries focus more on service and less on paperwork.
On the protection side, the Authority operationalised the Policyholders’ Education and Protection Fund under new regulations enabled by Section 16A of the IRDA Act, 1999. The fund will finance insurance literacy drives, strengthen grievance redressal, back tech-led improvements to customer service, and support tracing and recovery of unclaimed insurance amounts — money sitting unclaimed with insurers that rightfully belongs to policyholders or their families.
The regulator also approved a formal penalty framework, the IRDAI (Manner and Procedure for Imposition of Penalties) Regulations, 2026, setting out a uniform process for show-cause notices and reasoned orders under the Insurance Act, 1938, and the IRDA Act, 1999 — intended to make enforcement action against errant insurers and intermediaries more transparent and consistent.
On the industry side, IRDAI granted a certificate of registration to ProTec General Insurance Limited, the fourth new insurer registered this year, and approved amendments easing investment norms, capital infusion and share-transfer rules for insurers. It also noted that two insurers, one life and one general, have raised foreign shareholding beyond the earlier 74 per cent cap under the SBSR Act’s 100 per cent FDI window.
Also Read: Pet Insurance: A Complete Guide to Choosing the Right Cover for Your Dog or Cat
Today’s approvals cap a busy stretch of activity at IRDAI. Chairman Ajay Seth’s regulator has run most of these changes as public exposure drafts over the past few months, part of a broader shift toward formal, consultation-led rule-making under the SBSR Act. The meeting also follows earlier 2026 approvals of new general insurance licences under the widened FDI regime, and the registration of the Prudential-HCL joint venture as India’s eighth standalone health insurer earlier this month. Separately, the regulator is working on a distribution and commission reform paper aimed at curbing mis-selling, even as its Bima Sugam digital marketplace prepares for a phased launch of motor, health and term products by September-end.
IRDAI said it remains committed to the “expeditious implementation” of the SBSR Act reforms to support sector growth, policyholder protection, innovation and ease of doing business.
IRDAI: What This Means Going Forward
For policyholders, the seller-tagging requirement is likely to matter most at claim time and during grievance redressal, when knowing exactly who sold a policy can speed up accountability and reduce disputes over mis-selling. Industry watchers say the move fits into IRDAI’s broader push this year to tighten the intermediary ecosystem, even as the regulator continues to lean on public exposure drafts before finalising rules — a departure from its earlier, less consultative approach.
With the Policyholders’ Education and Protection Fund now operational and a standard penalty framework in place, attention is likely to shift to how quickly IRDAI acts on pending items such as the commission and distribution reform paper, and whether the phased Bima Sugam rollout stays on track for its September-end target. Insurers and intermediaries, meanwhile, will have to recalibrate internal systems to comply with the new perpetual registration and sales-person tagging norms in the coming months.
