IRDAI Issues New Guidelines Mandating Board-Approved Anti-Fraud Policy for Insurers

The Insurance Regulatory and Development Authority of India (IRDAI) has introduced the Insurance Fraud Monitoring Framework Guidelines, 2025, requiring all insurers to adopt a board-approved Anti-Fraud Policy to strengthen fraud prevention and risk management practices across the insurance sector.

Key Highlights:

• Zero-Tolerance Policy for Fraud:
  • Insurers must implement a comprehensive fraud risk management framework aimed at deterring, preventing, detecting, reporting, and remedying insurance frauds across all lines of business.
• Board-Approved Anti-Fraud Policy:
  • To cover all business operations and activities.
  • Must be reviewed at least once a year.
  • Should identify red-flag indicators and suggest procedures to manage fraud risk in each category of insurance activity.
• Cyber and New-Age Fraud Protection:
  Insurers are required to build and maintain a robust cybersecurity framework to counter emerging digital and cyber fraud risks.
  • Must include systems for incident tracking, customer verification, and access control.
  • Continuous monitoring and upgrading of cybersecurity measures are mandated.
• Formation of Risk Management Committee (RMC):
  • Insurers must constitute a Risk Management Committee responsible for implementing and overseeing the fraud risk management framework.
  • The framework should be tailored to the insurer’s business, considering factors like size, product mix, risk profile, and distribution channels.
• Guidelines Objective:
  • To ensure proactive fraud governance, improve market integrity, and safeguard policyholders’ interests through enhanced oversight and accountability.