INDIA Law and Practice Contributed by: Neeraj Tuli, Rajat Taimni, Amrit Singh and Anuj Bahukhandi, Tuli & Co
operational matters pertaining to retention, pro- cedures for placing reinsurance business, cession limits to cross border reinsurers (CBRs), and the requirement for obtaining collaterals while placing reinsurance business with CBRs. • The IRDAI (Actuarial, Finance and Investment Functions of Insurers) Regulations 2024 (as amended) and the “Master Circular on Actuarial, Finance and Investment Functions of Insurers” of 17 May 2024, consolidate and repeal the IRDAI’s norms in relation to an insurer’s appointed actuary appointments, duties and responsibilities, valuation of assets, liabilities and maintenance of solvency margin, financial statement preparation, invest- ments, and loans and advances. • The CG Regulations along with the IRDAI’s “Mas- ter Circular on Corporate Governance for Insurers 2024” of 22 May 2024 consolidate and repeal the earlier norms in relation to Board compositions and committees, key managerial personnel, remunera- tion requirements, audit, disclosure requirements, and the requirement for an ESG framework. • The IRDAI (Insurance Fraud Monitoring Framework) Guidelines 2025 came into effect on 1 April 2026 and apply to insurers and distribution channels. They establish a more structured framework for the prevention, detection, investigation, reporting and remediation of insurance fraud, including cyber and new age fraud. This has increased the regulatory emphasis on documented fraud controls and the evidential basis on which fraud-related claims deci- sions are made. 9.2 Forthcoming Reforms and Market Impact A number of recent and upcoming legislative and regulatory developments are expected to affect insur- ance coverage, policy wordings and claims handling practices in India. Some of these are set out below. • The IRDAI has recently issued amendments to several regulations, and proposed amendments to others, to operationalise and align the regulatory framework with the recently amended Insurance Act. Further amendments and implementing meas- ures are expected as this process continues.
• Foreign investment in an Indian insurer is now permitted up to 100%. This is expected to encour- age further entry by overseas insurers and reinsur- ers into the Indian market. In addition, GIFT City already has 22 reinsurers and is expected to attract further entrants. We expect increased reinsurance capacity in India to support greater risk appetite for complex and specialised risks and to potentially contribute to more competitive reinsurance pricing. • The IRDAI is yet to issue the regulatory framework for MGAs. This could have a significant impact on underwriting and claims handling, depending on the activities and authority ultimately permitted by the IRDAI. MGAs may also facilitate greater under- writing expertise and product innovation in special- ised lines such as cyber-, warranty and indemnity and tax insurance. • Bima Sugam is a unified digital marketplace and public infrastructure for insurance services in India, designed to bring together various stakeholders across the insurance ecosystem. It is expected to launch in the near future and could improve trans- parency, accessibility and standardisation in policy servicing and claims administration, including by facilitating more streamlined digital interactions between policyholders, insurers and other stake- holders. • Finally, most of the principal substantive obliga- tions under the DPDP Act and DPDP Rules are scheduled to take effect in May 2027. Their imple- mentation will affect the collection, use, retention and sharing of personal data throughout underwrit- ing and claims processes and is likely to require further changes to arrangements with intermediar- ies, TPAs, investigators, technology providers and other service providers. The DPDP Act’s significant penalties may also increase demand for cyber- insurance and prompt insurers to reassess cover- age provisions in relation to regulatory investiga- tions, fines and breach reporting costs.
163 I NSURANCE L I T IGATI O N 2026
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