INDIA Law and Practice Contributed by: Neeraj Tuli, Rajat Taimni, Amrit Singh and Anuj Bahukhandi, Tuli & Co
Recently, the Indian market has seen an increase in the volume as well as the quantum of claims reported, due to various ESG factors. Additionally, there has been a significant increase in premiums, particularly for life and health insurance, attributed to adverse mortality and morbidity rates, experienced in large part as a result of the COVID-19 pandemic. From a disputes perspective, ESG and climate-related risks have not yet resulted in a significant body of reported coverage litigation in India. However, the increasing frequency and severity of climate-related events may give rise to coverage issues concerning causation, aggregation, policy limits and exclusions, particularly under property, business interruption and liability policies. Insurers are responding to these evolving exposures through greater scrutiny at the underwriting stage and by reviewing the scope of coverage, policy limits and exclusions. As ESG and climate-related claims devel- op, disputes are therefore likely to turn increasingly on the precise policy wording and whether emerging risks fall within existing coverage or exclusions. 4.8 Delegated Authority and Claims Responsibility Historically, the regulatory framework in India has required insurers to retain responsibility for underwrit- ing and claims decisions. Broadly, the insurer remains responsible for the insurance business conducted by it. In health insurance, for example, third-party admin- istrators (TPAs) may undertake claims administration and provide cashless and related services, but claims processed by a TPA are ultimately referred to the insurer for decision. That said, the Insurance Act, India’s principal insurance statute, was recently amended by the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Act 2025, and now formally recognises managing general agents (MGAs) as a category of insurance intermedi- ary. However, the detailed IRDAI framework governing the registration, functions and permissible delegated authority of MGAs in mainland India remains under development. Statutory recognition of MGAs there- fore does not, by itself, determine the underwriting or claims authority that they may exercise.
In contrast, the International Financial Services Cen- tres Authority (IFSCA), the regulatory authority for India’s international financial services hub, has con- templated MGA structures in GIFT City since 2021 and has recently introduced a standalone regula- tory framework under the IFSCA (Managing General Agents) Regulations 2026. These regulations per- mit MGAs to exercise delegated underwriting and claims-settlement authority under binding authority agreements (BAAs), subject to specified limitations on coverage disputes. Given the relative novelty of the MGA or other del- egated structures in India, there is no body of dis- putes concerning them. Potential issues are likely to include whether an MGA acted within the scope of its authority, attributing any of its own representations or conduct to the insurer, the adequacy of oversight held by the insurer, and the contractual allocation of responsibility under the BAA. 4.9 Financial Lines Coverage Trends Among liability lines, PI has shown a steady increase in claims activity over the past five years and remains the busiest area for claims, followed closely by D&O and cyber-insurance. For PI policies, the information technology sector appears to generate various high- value claims, reflecting the growth of reliance on com- plex digital services and infrastructure. Claims arising from cloud-based services and infrastructure failures have become a major driver of losses as organisations become more dependent on third-party technology There is familiarity and demand for liability insurance, and, over the past five years, there has been a steady upward trend in claims made under PI policies. It remains the busiest claims area, followed closely by D&O. In fact, PI and D&O claims make up at least half of the total claims that the authors have seen being made under liability policies. The increase in the frequency and severity of liability claims is also influencing coverage disputes. In par- ticular, higher-value and more complex claims are giv- ing rise to greater scrutiny of the scope of indemnity, applicable exclusions, policy limits and the recover- vendors and interconnected systems. 4.10 Casualty Coverage Trends
157 I NSURANCE L I T IGATI O N 2026
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