IRDAI: Insurance Regulatory and Development Authority

Foreign investors could once own less than three-quarters of an Indian insurer. As of December 2025, they can own the whole thing.

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Indian Economy · IndEco0231

IRDAI

Insurance Regulatory and Development Authority

19 Apr 2000

IRDA becomes operational, as an autonomous statutory body.

Dec 2014

IRDA is renamed IRDAI, via an insurance-law ordinance.

20 Dec 2025

Sabka Bima Sabki Raksha Act assented; FDI cap raised to 100%.

2026

IRDAI rolls out reforms, to implement the new Act.

From 74% to 100%, in One Amendment

Foreign investors could once hold up to 74% of an Indian insurer. The Sabka Bima Sabki Raksha Act, 2025 raised that cap to 100%, part of a push toward “Insurance for All by 2047.”

📑 Contents

1Timeline
2Must Know
3Good to Know
4Test Yourself
5Great to Know
6Current Affairs

Timeline

19 April 2000: IRDA becomes operational, as an autonomous statutory body, under the IRDA Act, 1999.
26 December 2014: IRDA is renamed IRDAI, through the Insurance Laws (Amendment) Ordinance.
20 December 2025: The Sabka Bima Sabki Raksha Act, 2025 receives Presidential assent, raising the FDI cap to 100%.
2026: IRDAI operationalises reforms under the new Act, including perpetual intermediary registration.

🔑 Must Know

1. What IRDAI Is

Full Form IRDAI stands for the Insurance Regulatory and Development Authority of India.
Legal Basis It was set up under the IRDA Act, 1999. It became operational on 19 April 2000.
Status IRDAI is an autonomous statutory body, under the Ministry of Finance.

2. Role and Location

Mandate IRDAI’s role is to protect policyholders, and to develop India’s insurance sector.
HQ IRDAI is headquartered in Hyderabad, Telangana.

📊 Good to Know

1. Origins: The Malhotra Committee

1993 IRDAI’s creation followed the Malhotra Committee. It recommended an independent insurance regulator.
Opening Up The Committee also recommended opening insurance to private and foreign players.
2000 IRDAI ended the government’s insurance monopoly that year, opening the market to private insurers.

2. Structure and Renaming

Renamed IRDAI was originally called IRDA. It was renamed IRDAI in December 2014.
Composition IRDAI has 10 members: a Chairperson, five full-time members, and four part-time members.

Test Yourself

🌟 Great to Know

1. The Sabka Bima Sabki Raksha Act, 2025

FDI Cap The Act raised the FDI cap in Indian insurers, from 74% to 100%.
Reinsurers The same Act cut the net-owned fund requirement for foreign reinsurers, from ₹5,000 crore to ₹1,000 crore.
Goal It aims for “Insurance for All by 2047”, India’s 100th year of independence.

2. Newer Reforms

Registration IRDAI has replaced periodic licence renewal, for intermediaries, with perpetual registration and annual compliance.
Composite Licensing A parliamentary panel has separately urged IRDAI to introduce composite licensing. This would let one insurer sell life, health, and general policies together.

3. Cyber Insurance Coverage for Individuals

What’s Covered IRDAI-regulated personal cyber insurance typically covers three costs, beyond the loss of funds itself.
Malware It covers the cost of restoring your computer system, after a malware attack disrupts your access to it.
Extortion It covers the cost of hiring a specialist consultant, to reduce your loss during a cyber extortion attempt such as ransomware.
Legal Defence It covers your legal defence costs, if a third party sues you over a cyber incident.
Not Covered It typically does not cover the cost of a new computer, even if a hacker deliberately damaged the old one. That’s hardware replacement, not a cyber loss.

📰 Current Affairs

1. Rolling Out the 2025 Reforms

2026 IRDAI is rolling out reforms, to implement the Sabka Bima Sabki Raksha Act, 2025.
PEPF It has operationalised the Policyholders’ Education and Protection Fund. This aids grievance redressal and unclaimed-amount recovery.
New Licences IRDAI has also approved four new insurer licences in 2026, including general, health, and reinsurance players.