Source: The Hindu
Context
IRDAI, at its Authority meeting on Tuesday, 28 July 2026, approved several reforms including the Policyholders’ Education and Protection Fund (PEPF) Regulations. It introduced perpetual registration with an annual fee regime for intermediaries, replacing periodic renewals. It approved the Manner and Procedure for Imposition of Penalties Regulations, 2026.
Key Reforms
| Reform | Key Features & Significance |
|---|---|
| Policyholders’ Education and Protection Fund (PEPF) | Created under Section 16A of the IRDAI Act, 1999 (inserted by the SBSR Act, 2025) to promote insurance awareness, strengthen grievance redressal, improve technology-driven services, and facilitate recovery of unclaimed insurance amounts. IRDAI approved an initial corpus of ₹800 crore. |
| Perpetual Registration | Replaces periodic licence renewal of insurance intermediaries with perpetual registration supported by an annual fee, reducing compliance burden and shifting regulation to continuous supervision. |
| Salesperson Tagging | Requires every insurance proposal and policy to be linked to an authorised salesperson, improving accountability, traceability, and reducing mis-selling. |
| Penalties Regulations, 2026 | Introduces a transparent framework for imposition of penalties under insurance laws, specifying procedures, penalty computation, and appeal mechanisms. |
| New General Insurer | ProTec General Insurance received registration, becoming the fourth new general insurer approved since January 2026, reflecting increased competition in the sector. |
Practice MCQs
Q1. With reference to the recent IRDAI reforms, consider the following statements:
- The Policyholders’ Education and Protection Fund is intended to promote insurance awareness, strengthen grievance redressal and facilitate recovery of unclaimed insurance amounts.
- IRDAI has replaced periodic renewal of intermediary registrations with perpetual registration backed by an annual fee regime.
- IRDAI has mandated the tagging of authorised salespersons to every insurance proposal and policy.
- IRDAI granted registration to ProTec General Insurance, the first new insurer registration since 2020.
How many of the above statements are correct? (a) Only one (b) Only two (c) Only three (d) All four (e) None
Q2. With reference to insurance regulation in India, consider the following statements:
- IRDAI is a statutory body established under the IRDA Act, 1999, with its headquarters in Hyderabad.
- The Policyholders’ Education and Protection Fund has been constituted under a provision inserted into the IRDAI Act, 1999.
- Life Insurance Corporation of India, The New India Assurance Company and General Insurance Corporation of India have been designated as Domestic Systemically Important Insurers.
- The Depositor Education and Awareness Fund, which holds unclaimed bank deposits, is administered by IRDAI.
How many of the above statements are correct? (a) Only one (b) Only two (c) Only three (d) All four (e) None
Answer Key
- (c) — Statements 1, 2, 3 are correct; Statement 4 is wrong because ProTec General Insurance is the fourth registration since January 2026, not the first since 2020.
- (c) — Statements 1, 2, 3 are correct; Statement 4 is wrong because the Depositor Education and Awareness Fund is administered by the Reserve Bank of India under the Banking Regulation Act, 1949 — the insurance analogue is the PEPF under IRDAI.
