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IRDAI – Consultation paper & Exposure draft on IRDAI (Registration, Capital Structure, Transfer of S

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  • IRDAI – Consultation paper & Exposure draft on IRDAI (Registration, Capital Structure, Transfer of S

IRDAI Issues Consultation Paper on Proposed Amendments to Registration Regulations, 2026

The Insurance Regulatory and Development Authority of India (IRDAI) has issued a Consultation Paper along with an Exposure Draft on the Proposed Amendments to the Insurance Regulatory and Development Authority of India (Registration, Capital Structure, Transfer of Shares and Amalgamation of Insurers) Regulations, 2024 dated June 15, 2026. The Authority has invited comments from insurers, promoters, investors, professional bodies, legal experts, policyholders, and other stakeholders.

The Consultation Paper has been introduced to align the Registration Regulations with the Sabka Bima Sabki Raksha (Amendment of the Insurance Laws) Act, 2025 (SBSR Act).

Key Highlights

  • The proposed amendments seek to modernize the regulatory framework for insurance by revising eligibility norms for Indian and foreign promoters, strengthening safeguards for foreign investment, clarifying rules relating to Special Purpose Vehicles (SPVs), transfer of shares, and amalgamation of insurers with non-insurance entities, while streamlining procedures related to fees, insurer names, and application forms.
  • The proposed changes are aimed at promoting ease of doing business by simplifying regulations, reducing compliance burdens and costs, improving operational clarity, and facilitating smoother capital infusion into the insurance sector.
  • The amendments also seek to accelerate the growth of the insurance sector while strengthening policyholder protection, enhancing transparency, improving regulatory oversight, and simplifying business processes for insurers, intermediaries, and other stakeholders.
  • The major proposed amendments are summarized below.

Summary of Proposed Amendments

A. Definitions of Promoters and SPVs

The amendments propose revisions to the definitions of
“Foreign Promoter”,
“Indian Promoter”, and
“Special Purpose Vehicle (SPV)” to ensure consistency, eliminate interpretational ambiguities,
strengthen regulatory oversight, and introduce safeguards in light of the increased Foreign Direct Investment (FDI) limit.

B. Registration Forms, Processing Fees and Insurer Names

The amendments propose:

  • Insertion of Forms IRDAI/R1 and IRDAI/R2.
  • Inclusion of Schedule references for Form IRDAI/R3.
  • Introduction of a processing fee of INR 10,000 for No Objection Certificate (NOC) applications.
  • Restructuring of provisions relating to insurer names to formalize application procedures and improve regulatory clarity.

C. Special Purpose Vehicles (SPVs)

Applicants proposing an SPV structure will be required to justify the necessity of adopting such a structure. The amendments also extend recognition to eligible foreign-incorporated SPVs established in FATF-compliant jurisdictions.

D. Transfer of Shares

The amendments clarify:

  • Approval requirements in cases of renunciation under rights issues.
  • Alignment with the revised thresholds prescribed under Section 6A.
  • Approval thresholds applicable at every multiple of 5% shareholding.
  • Rationalization of processing fees to simplify compliance and reduce ambiguity.

E. Amalgamation of Insurers

The amendments incorporate provisions introduced under the SBSR Act by covering:

  • Eligible non-insurance entities.
  • Conditions governing amalgamation.
  • Payment mechanisms.
  • Post-amalgamation safeguards.
  • Measures to protect policyholders’ interests.

F. Reduction in Processing Fees

The proposed amendments significantly reduce processing fees by:

  • Reducing the fee for amalgamation applications from a premium-linked structure to a fixed fee of INR 10 lakh per transacting party.
  • Reducing the fee for transfer of shares involving more than 50% equity transfer from INR 50 lakh to INR 10 lakh.

These reductions are intended to lower management expenses and support the affordability of insurance products.

G. Regulation 56A – Insurer Names

A new Regulation 56A is proposed to:

  • Govern the naming of insurers.
  • Provide a transition period for existing insurers.
  • Require prior approval for any change in an insurer’s name.
  • Ensure compliance with the SBSR Act requirement that every insurer’s name includes the words “Insurance”, “Assurance”, or “Reinsurance”.

Ease of Doing Business

The proposed amendments aim to improve the ease of doing business by:

  • Reducing processing fees for amalgamation and share transfer applications.
  • Removing valuation certification requirements at the registration stage.
  • Clarifying approval requirements for issuance of shares at a premium.
  • Formalizing registration application procedures.

These measures are expected to simplify regulatory compliance, reduce operational costs, facilitate investment, and encourage business growth within the insurance sector.

Policyholder Protection

The proposed amendments continue to emphasize policyholder protection by:

  • Permitting only incorporated foreign promoters from FATF-compliant jurisdictions.
  • Introducing safeguards for amalgamations involving non-insurance companies.
  • Restricting the use of policyholders’ funds for payment of amalgamation consideration.
  • Strengthening financial stability and regulatory oversight.

Submission of Comments

Stakeholders may submit comments on the Exposure Draft in the format prescribed under
Annexure 2.

Feedback may be submitted to:

  • Mr. Nirmal Jain – nirmal.jain@irdai.gov.in
  • Copy to: Mr. Mahesh Agarwal – maheshagarwal@irdai.gov.in
  • Last Date for Submission: July 6, 2026

Attachments

Source: IRDAI

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