IRDAI’s proposed 2026 overhaul of Insurance Intermediary Regulations: Detailed overview

The Insurance Regulatory and Development Authority of India (IRDAI) has circulated a consultation paper proposing extensive changes to the regulatory regime for insurance intermediaries. These changes are to be implemented through the Insurance Regulatory and Development Authority of India (Insurance Intermediaries) (Amendment) Regulations, 2026, and are primarily intended to align existing regulations with the Sabka Bima, Sabki Raksha (Amendment of Insurance Laws) Act, 2025 (“SBSR Act”).

The proposals affect the entire ecosystem of insurance distribution entities, including:

  • Corporate Agents
  • Insurance Brokers
  • Insurance Marketing Firms
  • Insurance Web Aggregators
  • Common Public Service Centers (CPSC)

IRDAI’s recommendations focus on easing compliance, rationalising fees, redefining terminology, introducing new disclosure standards, and tightening business conduct norms, particularly to curb mis-selling and strengthen policyholder protection.

1. Context: Legislative changes under the SBSR Act, 2025

Activities relating to solicitation and procurement of insurance business in India are mainly governed by:

  • Insurance Act, 1938
  • Entity-specific IRDAI regulations (for Corporate Agents, Brokers, Marketing Firms, Web Aggregators, and CPSC)

These frameworks already mandate:

  • Registration and eligibility conditions
  • Fit and proper criteria for promoters and key personnel
  • Codes of conduct and business standards
  • Capital, governance and reporting requirements

With the SBSR Act, 2025, Parliament has introduced substantial, forward-looking reforms to push growth in the insurance sector while enhancing policyholder safeguards and improving regulatory clarity.

1.2 Objectives of the SBSR reforms

As captured in the statement of objects and reasons to the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill, 2025, the reform package aims to:

  • Accelerate expansion and development of the insurance sector
  • Provide stronger protection to policyholders
  • Improve ease of doing business for insurers and insurance intermediaries
  • Enhance transparency and predictability in regulation-making
  • Strengthen IRDAI’s supervisory grip over market conduct

The draft Insurance Intermediaries (Amendment) Regulations, 2026 are designed to translate these legislative objectives into operational rules for all categories of insurance intermediaries.

2. Core themes of the proposed amendments

IRDAI’s consultation paper clusters the proposed changes around several key themes.

2.1 Terminology alignment: “Insurance Intermediary”

The SBSR Act has replaced the generic term “Intermediary” with “Insurance Intermediary” across the Insurance Act, 1938. To maintain uniformity:

  • All IRDAI regulations governing distribution entities will now adopt the term “Insurance Intermediary” in place of “Intermediary”.
  • This applies across regulations for Corporate Agents, Insurance Brokers, Insurance Marketing Firms, Web Aggregators and CPSC.

This semantic shift is primarily clarificatory, but it is being implemented comprehensively via amendments in each set of regulations.

2.2 Removal of renewal concept and shift to perpetual registration

Under the existing framework, most intermediaries are granted a Certificate of Registration (CoR) with a finite validity (typically three years), necessitating formal renewal processes.

IRDAI now proposes that:

  • Once a Certificate of Registration is granted, it will remain in force indefinitely, subject to payment of prescribed annual fees and compliance with ongoing regulatory conditions.
  • The traditional “renewal of registration” provisions are to be deleted or recast as “issuance of fresh certificate to existing intermediaries” only for one transitional cycle.

For example, in the case of Corporate Agents:

  • Regulation 10 is substituted to state that CoR remains valid until surrendered, suspended or cancelled, contingent on payment of annual fee specified in Schedule VI.

Similarly, for Insurance Brokers:

  • Regulation 11 is amended to provide that registration continues in force, subject to payment of non-refundable annual fee under Schedule I – Form D, until surrendered, suspended or cancelled.

This structurally moves the regulatory system from a renewal-based regime to a perpetual registration with annual fee and compliance monitoring.

2.3 New annual fee framework and consequences of non-payment

A central design change is the introduction of a uniform annual fee structure for all insurance intermediaries, based on business volume.

2.3.1 Fee structure for Corporate Agents

Under the newly inserted Schedule VI to the IRDAI (Registration of Corporate Agents) Regulations, 2015:

  1. Application fee

    • At the time of filing for registration under Regulation 4, each applicant must pay a non-refundable fee of Rs. 10,000 by electronic transfer.
    • Applications without this fee will not be processed.

  2. Annual fee mechanics

    • After IRDAI communicates its decision to grant registration (whether under Regulation 4 or Regulation 11), the applicant must remit the annual fee within 15 days.
    • Going forward, every Corporate Agent must pay annual fee before 31st January of the preceding financial year.

  3. Quantum of annual fee
    The annual fee is the higher of:

    • Rs. 10,000; or
    • One-twenty fifth of one percent of commission and other receipts from insurers in the immediately preceding financial year, rounded up to the nearest thousand.

  4. Penalty for late payment

    • If the annual fee is paid within 30 days after the due date: additional 2% of annual fee.
    • If paid after 30 days but before end of that financial year: additional 10% of annual fee.

  5. Non-payment by end of financial year

    • Failure to pay by year-end may lead to suspension or cancellation of the CoR as per the Insurance Act.