IRDAI’s Proposed 2026 Regulations on Rule-Making and Subsidiary Instructions: A Complete Overview
The Insurance Regulatory and Development Authority of India (IRDAI) has circulated an Exposure Draft titled Insurance Regulatory and Development Authority of India (Procedure for Making Regulations and Subsidiary Instructions) Regulations, 2026. This draft sets out a comprehensive, codified process for how IRDAI will:
- Formulate new regulations,
- Amend existing regulations,
- Periodically review regulations, and
- Issue and amend “subsidiary instructions”.
This proposed framework is intended to give effect to the amendments brought in by the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Act, 2025 (SBSR Act), and to align with the updated provisions of the Insurance Act, 1938 and the Insurance Regulatory and Development Authority Act, 1999.
Rather than merely restating existing practice, the draft regulations seek to clearly standardise, formalise and publish the internal process IRDAI will follow for regulation-making and related instruments, focusing on transparency, stakeholder engagement and periodic impact review.
1. Purpose and Context of the Proposed Regulations
The SBSR Act, 2025 introduced a statutory framework requiring:
- Consultative processes in regulation-making,
- Mandatory public exposure of draft regulations,
- Periodic review of regulations in force,
- A formal regime for subsidiary instructions, and
- Consultative Committees to advise IRDAI on such subsidiary instructions.
In practical terms, the proposed 2026 Regulations are designed to:
- Translate these statutory provisions into an operational process;
- Codify IRDAI’s existing practices on public consultation and draft exposures; and
- Make the regulatory system more predictable, stable and participative for the insurance sector.
2. Key Features of the Proposed Framework
The Exposure Draft identifies several core components of the new framework. These can be grouped into four broad themes:
- Principles of regulation-making and policyholder focus
- Transparent, consultative procedures for regulations
- Structured rules on subsidiary instructions and consultative committees
- Mechanisms for review, amendment and urgent action
Each of these is discussed below.
3. Principles Guiding IRDAI’s Regulation-Making
The draft regulations begin by setting out foundational principles that IRDAI must keep in view whenever it frames regulations. These principles are not merely aspirational; they are intended to guide the design, scope and content of each regulation. They include:
Protection of policyholders’ interests
Ensuring that any regulatory intervention first and foremost safeguards the rights, expectations and financial security of insurance policyholders.Orderly growth of the insurance industry
Regulatory tools should support a healthy, stable and sustainable expansion of the insurance ecosystem, rather than creating unnecessary constraints.Improvement in quality of insurance services and trust
Regulations must help enhance service standards, grievance redressal and market conduct, thereby boosting overall public confidence in insurance.Transparency, proportionality and accountability
- Transparency: clarity as to the reasons and objectives for any regulatory change;
- Proportionality: obligations should be commensurate with the risks addressed;
- Accountability: IRDAI’s decisions should be traceable to recorded reasons and processes.
Ease of doing business and compliance rationalisation
The framework specifically highlights the need to reduce duplicative or obsolete requirements and promote a smoother business environment for regulated entities.Use of technology for regulatory efficiency
Adoption of digital tools and data-driven supervision is encouraged, both in how regulations are implemented and how compliance is monitored.Adoption of best practices
Where appropriate, IRDAI will look to global and domestic best practices as reference points while designing or updating regulations.