The Insurance Regulatory and Development Authority of India (IRDAI) has unveiled a comprehensive set of regulatory, supervisory and developmental reforms, marking a major milestone in its efforts to modernise the insurance sector, strengthen governance and accelerate insurance penetration across the country.The reforms, approved by the IRDAI board meeting on Tuesday, are designed to provide insurers with greater operational flexibility, facilitate capital formation, improve governance standards and reinforce policyholder protection while enhancing the ease of doing business across the insurance ecosystem. These measures aim to support implementation of the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Act, 2025 (SBSR Act), it said.Among the key decisions is the approval of amendments to the IRDAI (Actuarial, Finance and Investment Functions of Insurers) (Second Amendment) Regulations, 2026 and the IRDAI (Registration, Capital Structure, Transfer of Shares and Amalgamation of Insurers) (Amendment) Regulations, 2026.Also Read | Insurers seek first third-party premium hike in four years as losses mountAccording to IRDAI, the changes provide insurers with “greater operational and financial flexibility through liberalised investment norms, a facilitative framework for capital infusion and corporate restructuring, and streamlined provisions relating to transfer of shares and amalgamations while strengthening actuarial oversight and financial governance.” The reforms are expected to improve the ease of doing business, enhance financial resilience and support the long-term growth of insurers without compromising policyholder interests, it said.A major policyholder-centric initiative approved by the regulator is the IRDAI (Policyholders’ Education and Protection Fund) Regulations, 2026, which operationalise the Policyholders’ Education and Protection Fund (PEPF) constituted under Section 16A of the IRDA Act, 1999, as introduced by the SBSR Act.IRDAI said the PEPF establishes a dedicated institutional mechanism to promote insurance awareness and literacy initiatives, strengthen grievance redressal mechanisms, leverage technology to improve policyholder services, facilitate tracing and recovery of unclaimed insurance amounts, and support other initiatives aimed at empowering and safeguarding policyholders.Insurance intermediaries get revised frameworkIn another significant move to strengthen accountability within insurance distribution, the regulator has approved amendments to the regulations governing insurance intermediaries. A key feature of the reforms is the mandatory tagging of the authorised sales person to every insurance proposal, policy and certificate of insurance. “The requirement enhances accountability and traceability across the insurance distribution process, strengthens regulatory oversight and promotes greater transparency for policyholders,” IRDAI said.Story continues below this adThe amendments also introduce perpetual registration for intermediaries through an annual fee regime, replacing periodic renewals. The revised framework streamlines compliance requirements, aligns the regulations with the SBSR Act and Foreign Investment Rules, and strengthens governance through enhanced disclosure and accountability standards, the regulator said.These changes are expected to reduce compliance costs while enabling intermediaries, third-party administrators and surveyors to focus on delivering better and more accessible services to policyholders.To reinforce confidence in the regulatory framework, IRDAI has also approved the IRDAI (Manner and Procedure for Imposition of Penalties) Regulations, 2026. The new regulations establish a transparent, uniform and proportionate enforcement framework under the Insurance Act, 1938, and the IRDAI Act, 1999.According to IRDAI, the regulations provide “a structured process for initiation of proceedings, issuance of show-cause notices and passing of reasoned orders, thereby promoting consistency, fairness and transparency in regulatory actions.” The framework would enhance regulatory certainty for regulated entities while strengthening accountability and public confidence in the insurance sector, it said.Story continues below this adNew non-life firm approvedMeanwhile, IRDAI granted a Certificate of Registration to ProTec General Insurance Ltd, allowing the company to commence general insurance business under the applicable regulatory framework. This is the fourth registration approved by IRDAI during calendar year 2026, comprising two general insurers, one health insurer and one reinsurer.IRDAI also highlighted encouraging progress in implementing the capital reforms introduced under the amended law. Following the government’s decision to permit up to 100% foreign investment in insurers, two insurance companies — one life insurer and one general insurer — have already increased foreign shareholding beyond the earlier ceiling of 74%.The regulator said the development signals enhanced investor confidence, is facilitating greater capital inflows and reaffirms the country’s position as an attractive destination for long-term investment in the insurance sector. The latest package of reforms is expected to accelerate the sector’s growth while balancing business expansion with stronger governance and enhanced protection for millions of policyholders.