IRDAI Policyholders Education and Protection Fund Regulations 2026: Stakeholder Feedback and Regulatory Responses Decoded
The Insurance Regulatory and Development Authority of India (IRDAI) recently released its consolidated response to public comments received on the Exposure Draft of the Insurance Regulatory and Development Authority of India (Policyholders Education and Protection Fund) Regulations, 2026 — referred to hereafter as the PEPF Regulations. This document captures the regulatory stance of IRDAI across multiple provisions, addressing concerns raised by stakeholders ranging from insurers and intermediary bodies to consumer representatives and industry councils.
The following is a structured breakdown of each major area of stakeholder concern and the corresponding regulatory position adopted by IRDAI.
1. Establishment of the Fund — Contracts, Grants, and MoUs
Stakeholder Concern
Several stakeholders sought greater clarity on the operational mechanism through which the Authority intends to enter into contracts, grants, and Memoranda of Understanding (MoUs) for the purpose of implementing Fund-supported activities under the PEPF framework.
IRDAI's Position
IRDAI clarified that these are essentially operational and administrative matters and do not need to be embedded within the Regulations themselves. Such aspects will be addressed through administrative orders issued by the Authority at the appropriate time. The regulatory text is designed to lay down the broad framework, while procedural and contractual specifics will be governed by separate administrative instruments.
Key Takeaway: The Regulations will not prescribe the mechanics of contracting or grant-making. Administrative orders will handle these details separately.
2. Amounts Credited to the Fund — Investment Income and Claimant Rights
Stakeholder Concern
A section of stakeholders put forward two specific suggestions:
- Investment income earned on the corpus of the Fund should be explicitly recognised as a source of the Fund.
- The rights of eligible claimants should be preserved even after undistributed disgorgement amounts have been transferred to the PEPF.
IRDAI's Position
On the question of investment income, IRDAI clarified that income generated on the corpus will be utilised solely for the purposes enumerated in the Regulations and will therefore not be treated as part of the Corpus Fund itself. This distinction is deliberate — by keeping investment income separate, any unspent income from a given year remains available for deployment in the subsequent year, ensuring continuity of purpose-driven expenditure without eroding the principal corpus.
On the question of claimant rights, IRDAI indicated that the suggestion to preserve the rights of eligible claimants even post-transfer of undistributed disgorgement amounts to the PEPF is acceptable and may be incorporated.
Key Takeaway: Investment income sits outside the Corpus Fund and is available on a rolling annual basis. Rights of eligible claimants will be protected even after transfer of funds to PEPF.
3. Utilisation of the Fund — Technology Infrastructure and Unclaimed Amount Recovery
Stakeholder Concern
Two distinct utilisation-related requests were placed before the Authority: