Master Circular on Rural, Social Sector and Motor Third Party Obligations, 2025

Dear Sir/Ma’am,

IRDAI vide Master Circular bearing reference no: Ref: IRDAI/NL/CIR/RSS/85/07/2025 dated July 25, 2025, issued Master Circular on Rural, Social Sector and Motor Third Party Obligations (“ Master Circular 2025 ”). The Master Circular 2025 shall apply to all life, general and stand-alone health insurers in India.

The Master Circular 2025 applies to FY 2024-25 only, while the 2025 Master Circular applies to FYs 2025-26 and 2026-27.

1. Every insurer shall undertake obligations set out by the Authority during the financial years indicated herein –

A. Obligation with respect to Rural Sector:

a) Life Insurance –

1. Each life insurer must cover a minimum percentage of lives through individual and/or group policies in designated Gram Panchayats. Collectively, all insurers must cover a specified minimum number of Gram Panchayats.
2. As per Regulation 7(C) of the IRDAI (Rural, Social Sector and Motor Third Party Obligations) Regulations, 2024 (“2024 Regulations”) the obligations for the second and third year are as follows:

b) General Insurance (General Insurers other than stand-alone health insurer (SAHI), Agriculture Insurance Co. Ltd (AIC) and ECGC) –

1. Every General Insurers-1 shall cover a minimum percentage of dwellings (Fire insurance) and vehicles (Motor insurance) in designated Gram Panchayats, with all insurers collectively covering a set number of Gram Panchayats.
2. Rural obligations for the second and third year, as per Regulation 7(C) of the 2024 Regulations are as follows:

c. Health Insurance (General Insurers including SAHI other than AIC and ECGC) –

1. General Insurer-2 shall insure a specified percentage of lives in allocated Gram Panchayats under health and personal accident policies.
2. Rural obligations for the second and third year, as per Regulation 7(C) of the 2024 Regulations are as follows:

2. What to Measure

a. The respective Councils, in consultation with insurers:

1. shall identify appropriate parameters such as market share or any other relevant metric to determine the minimum number of Gram Panchayats to be allocated to each insurer.
2. based on this, the Councils will determine the minimum number of Gram Panchayats to be allotted to each insurer.
3. shall communicate the minimum number of Gram Panchayats to insurers at least 45 days before the end of the preceding financial year.

b. After receiving their minimum Gram Panchayat targets, each insurer in consultation with the respective Council and other applicable insurers shall identify Gram Panchayats of their choice across States and UTs to ensure nationwide coverage and that no State/UT is left unrepresented.

1. Insurers shall coordinate to cover a minimum number of Gram Panchayats nationwide, ensuring no overlap and full regional representation.
2. Insurers shall share their selected Gram Panchayats with other life insurers and Councils to ensure coordination and avoid overlap.
3. Respective Councils shall ensure no Gram Panchayat is allocated to more than one insurer within the same category (Life, General Insurer-1, General Insurer-2).
4. After finalizing the list, Councils will share the insurer-wise allocations with IRDAI at least 30 days before the financial year starts.
5. For FY 2025–26, insurers are encouraged to continue with their FY 2024–25 Gram Panchayat allocations to maintain consistency. If changes are necessary, insurers must submit revised lists with reasons to the respective Council by 31st July 2025. The Councils will then submit the finalized list to IRDAI by 14th August 2025.

3. Capturing of Village LGD Code

1. The Local Government Directory (LGD), managed by the Ministry of Panchayati Raj, is the official source for updated records of administrative units.
2. The Life and General Insurance Councils shall obtain and share the “District–Village Panchayat–Village–Pincode” mapping from the LGD with all insurers to ensure consistent identification of rural business during underwriting.
3. Insurers shall update their systems and processes to capture the Village LGD Code at underwriting, which will be used to monitor compliance with rural sector obligations.

4. How to Measure

a) Life Insurance – For Life Insurers; Health Insurance – For General Insurer-2

Insurers shall obtain data on the number of lives and demographics for each Gram Panchayat by coordinating with relevant government bodies, including the Ministry of Panchayati Raj and local authorities. Public government portals may also be used to supplement or verify this information.

b) General Insurance – For General Insurer-1

Insurers shall obtain details on dwellings, shops, and motor vehicles in each allocated Gram Panchayat, in coordination with government and local panchayat authorities. They may also use publicly available government data sources for validation.

c) Base Data for Each of the Gram Panchayats Allotted (hereinafter referred to as “base data”) – to All Insurers:

1. Each Insurer shall compile and submit demographic or asset-based base data for each allotted Gram Panchayat to their respective Council, which will maintain a centralized database. Insurers shall also submit quarterly reports detailing coverage as per Council guidelines. Councils, with insurers, will set up systems to track, update, and replicate best practices, with an annual base data review due by June 30 each year (September 30 for FY 2025–26).
2. To achieve the goal of full saturation of the Gram Panchayat, the insurers shall work in close coordination with the Gram Sarpanch and Gram Sachiv.

5. When to Measure

1. The respective Councils, in coordination with insurers, shall collect and submit insurer-wise data to IRDAI within 30 days after each quarter, detailing lives insured (for Life Insurers and General Insurer-2) and dwellings, shops, and motor vehicles covered (for General Insurer-1) for each allocated Gram Panchayat.
2. Any shortfall in meeting the specified obligations will be treated as non-fulfilment by the concerned insurer.

6. How to Check Compliance

1. Insurers shall obtain a quarterly certificate from the Gram Sachiv using a standard format provided by the Councils, confirming the number of lives, dwellings, shops, or vehicles insured in each allocated Gram Panchayat.
2. If the Gram Sachiv’s position is vacant, an authorized substitute may issue the certificate, which will serve as the official proof and must be stored electronically for IRDAI verification.
3. If insurers are unable to obtain the certificate despite best efforts, self-certification using Local Government Directory data is permitted for up to 25% of allocated Gram Panchayats. This shall be signed by the CEO and certified by the statutory auditor of the respective insurer, along with valid reasons for not obtaining the Gram Sachiv certificate.

7. In respect of all Insurers (Life, General and Standalone Health, excluding AIC and ECGC)

a. What to measure –

Minimum number of lives under the Social Sector, as a proportion of total lives insured.

b. How to measure –

c. Respective Councils shall –

1. Coordinate with Government agencies to gather and share social sector population data with relevant insurers.
2. They shall seek access to beneficiary lists of Central/State schemes via official scheme websites and relevant databases, including those listed in Regulation 5(b) and 5(c).
3. If no Government ID is available, insurers may accept self-certification of the prospect along with supporting proof such as photographs. Such cases should be limited to 20 percent of the total Social Sector obligation.

d. When to Measure –

Within 30 days after the end of each quarter, insurers shall report to IRDAI the number of lives covered under the Social Sector as a proportion of total lives covered.

e. How to Check Compliance –

The insurer shall record classification of lives as per the definition of “Social Sector” and maintain the source/database from where the Social Sector lives are taken.

8. For General Insurer – 1

a. What to Measure –

Minimum percentage increase in the number of goods carrying vehicles, passenger carrying vehicles, and tractors insured.

b. How to Measure –

The General Insurer – 1, along with the General Insurance Council, shall:

1. Engage with the Insurance Information Bureau (IIB) and State Regional Transport Authorities (RTAs) to identify uninsured goods vehicles, passenger vehicles, and tractors.
2. In consultation with IIB, prepare a list of uninsured goods carrying vehicles, passenger carrying vehicles, and tractors which shall include the category of vehicle, its registration number, owner name, and the State RTA of registration.

c. What to Measure –

1. The number of goods carrying vehicles, passenger carrying vehicles, and tractors already on its books and/or on the books of other insurers and renewed by it; and
2. The number of uninsured goods carrying vehicles, passenger carrying vehicles, and tractors insured by it.

d. How to Check Compliance –

For the purposes of checking compliance, the data submitted will be cross-verified against the IIB database of uninsured vehicles.

9. Reporting Requirements

1. The insurer shall submit returns to the Authority as per the Master Circular.
2. Insurers shall submit Rural, Social, and Motor Third Party (MTP) obligation data to IIB in the prescribed formats, similar to other Lines of Business (LoBs).

Source category: IRDAI

Attachments

• Master Circular on Rural Social Motor TP obligations