IRDAI insurance reforms: IBAI chief Narendra Bharindwal explains how new initiatives protect policyholders

The Insurance Regulatory and Development Authority of India (IRDAI) has rolled out a series of regulatory reforms aimed at making insurance distribution more transparent, improving accountability among intermediaries and strengthening safeguards for policyholders.

Under the newly notified Insurance Intermediaries (Amendment) Regulations, 2026, the regulator has introduced sweeping changes to the way insurance products are sold and monitored. The reforms include mandatory tagging of every insurance policy to the individual salesperson who completed the sale, replacement of periodic licence renewals with perpetual registration, tighter governance and disclosure requirements, and measures to improve oversight across the insurance distribution network.

The changes are expected to bring greater responsibility among insurance agents, brokers, corporate agents and other intermediaries, while giving customers more transparency about who sold them a policy.

Major milestone, says IBAI chief

Insurance Brokers Association of India (IBAI) President Narendra Bharindwal described the regulator's initiative as a major milestone in enhancing accountability and protecting the interests of policyholders.

Bharindwal told Mint: “Assigning responsibility to an identified salesperson enhances transparency and creates greater ownership of the advice and service provided to customers.”

“The industry has consistently adapted to regulatory reforms, and we are confident this framework will strengthen customer trust and improve the quality of insurance distribution,” he said.

According to the IRDAI, the reforms are intended to improve "accountability and traceability across the insurance distribution process," while strengthening regulatory supervision and promoting higher levels of transparency for customers purchasing insurance products.

A key feature of the overhaul is the introduction of perpetual registration for insurance intermediaries. Under the new framework, intermediaries will no longer be required to periodically renew their licences. Instead, they will continue to operate under a perpetual registration system, subject to the payment of an annual regulatory fee and ongoing compliance with prescribed norms.

“Perpetual registration is among the most progressive ease-of-doing-business reforms introduced by the regulator. It eliminates repetitive procedural requirements, allowing intermediaries to focus more on governance, customer service and business development rather than administrative renewals,” said Bharindwal. “That said, perpetual registration should not be mistaken for lighter regulatory oversight.”

The IBAI chief also noted that one of the most significant aspects of the reforms is the increased reliance on technology to strengthen governance and improve monitoring of insurance distribution activities.

“Brokerages will increasingly need integrated digital systems that maintain complete audit trails—from customer advice and documentation to policy issuance, remuneration, servicing and claims support. Firms will also need stronger compliance monitoring, better data governance and structured training programmes,” added Bharindwal.

In addition to the intermediary reforms, the regulator has approved the IRDAI (Manner and Procedure for Imposition of Penalties) Regulations, 2026, creating a more structured framework for regulatory enforcement.

According to the regulator, the new penalty regulations establish a transparent, consistent and proportionate mechanism for enforcement under the Insurance Act, 1938 and the IRDA Act, 1999. The objective is to ensure uniformity in regulatory action while maintaining fairness in the imposition of penalties.

Customer outcomes matter

The reforms are also expected to reshape the way insurance intermediaries are assessed by placing greater emphasis on accountability, governance standards and regulatory compliance, while reinforcing confidence in India's insurance distribution ecosystem.

“Insurance distribution should increasingly be assessed on customer outcomes rather than business volumes alone. Metrics such as policy persistency, complaint ratios, quality of advice, grievance resolution, customer retention and claims support provide a more holistic measure of an intermediary's contribution,” said Bharindwal.