The Insurance Regulatory and Development Authority of India (IRDAI) is an autonomous and statutory body established under the Insurance Regulatory and Development Authority Act, 1999. It functions under the Ministry of Finance, Government of India, and is tasked with regulating, promoting, and licensing the insurance and re-insurance industries in India.
The IRDAI was created following the recommendations of the Malhotra Committee Report (1994-95), which suggested an independent regulator to oversee the sector. Before its establishment, the insurance sector was largely controlled by the government, with a monopoly held by the Life Insurance Corporation of India (LIC) and public sector general insurance companies. The primary problem it solved was the need to liberalize the sector, end the state monopoly, encourage competition, and strengthen policyholder protection. The IRDA Act, 1999, opened the market to private and foreign companies, initially allowing up to 26% foreign equity.
The mechanism of the IRDAI is defined by its functions under Section 14 of the IRDAI Act, 1999, which include issuing and modifying registrations, specifying qualifications for intermediaries, regulating the investment of funds, and ensuring the financial soundness of insurers. A key provision is the protection of policyholders' interests, which involves addressing grievances and regulating premium rates and terms. The IRDAI works in conjunction with the Insurance Act, 1938, and the Life Insurance Corporation Act, 1956.
Recently, the IRDAI has introduced significant changes, partly to align with the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Act, 2025. These amendments include replacing periodic license renewals for insurance intermediaries with perpetual registration and introducing mandatory tagging of every policy to the individual salesperson to enhance accountability. Furthermore, the IRDAI has removed the age limit for purchasing new health insurance policies, effective from April 1, 2024.