IRDAI Strengthens Safeguards for Motor Insurance Policyholders’ Interests: What You Need to Know

The insurance sector regulator, the Insurance Regulatory and Development Authority of India (IRDAI), has implemented multiple regulatory measures to safeguard policyholders’ interests, mandating insurers to follow transparent, fair and time-bound claim settlement practices. These rules are designed to curb arbitrary or coercive conduct, particularly in the settlement of motor insurance claims.

The IRDAI (Protection of Policyholders’ Interests, Operations and Allied Matters of Insurers) Regulations, 2024 serve as the core legal instrument governing claim settlement processes. The regulations require insurers to adopt board-approved claim settlement policies and ensure transparency throughout the claims lifecycle.

Mandatory Disclosures and Transparency in Claims

Under the 2024 regulations, insurers must clearly disclose the roles, responsibilities and appointment details of surveyors and loss assessors to policyholders. All deductions made during claim settlement must be reasonable, transparent and supported by documentary justification, ensuring informed decision-making by insured individuals.

Decline in Motor Insurance Complaints

IRDAI data indicates an improvement in grievance trends within the motor insurance segment. The share of motor insurance complaints declined from 26.18% of total complaints in FY 2023–24 to 24.8% in FY 2024–25, reflecting the impact of enhanced regulatory oversight.

Insurance Ombudsman Complaint Disposal

Between FY 2022–23 and FY 2024–25, the Insurance Ombudsman received a total of 10,156 complaints under the motor insurance category. Of these, 9,943 complaints were disposed of through awards, withdrawals or classification as non-entertainable, while the remaining cases are currently under process.

As per the Master Circular on Protection of Policyholders’ Interests, 2024, motor insurance claims involving losses below ₹50,000 do not mandatorily require assessment by a registered surveyor. Insurers have increasingly adopted app-based and AI-driven assessment tools to expedite settlement of such claims.

Monitoring of Surveyors and Loss Assessors

The IRDAI (Insurance Surveyors and Loss Assessors) Regulations, 2015 empower insurers to monitor surveyor performance, including compliance with the prescribed code of conduct. Insurers are required to investigate reported deviations, conduct enquiries where necessary, and report confirmed violations to IRDAI for further action.

IRDAI has the authority to suspend a surveyor’s licence on grounds such as failure to perform duties professionally, violation of the code of conduct, or actions prejudicial to policyholders’ interests. Such cases are processed strictly in accordance with the regulatory framework.

Also Read: PFRDA Announced New Rules for NPS: Al You Need to Know

As part of regulatory enforcement based on inspection findings, IRDAI has issued 53 cautions and advisories to surveyors during FY 2022–23, FY 2023–24 and FY 2024–25, underscoring its continued focus on accountability and policyholder protection.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.