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Irdai proposed reforms to insurer registration framework aligned with SBSR Act
Jun-16-2026

The Insurance Regulatory and Development Authority of India (IRDAI) has proposed amendments to the Insurance Regulatory and Development Authority of India (Registration, Capital Structure, Transfer of Shares and Amalgamation of Insurers) Regulations, 2024 (Registration Regulations), in light of the changes introduced through the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Act, 2025 (SBSR Act). The proposed amendments seek to align the existing regulatory framework with the revised provisions of the Insurance Act, 1938 and facilitate a transparent, growth-oriented, and globally aligned insurance ecosystem while ensuring continued protection of policyholder interests.

The proposed changes relate to regulatory framework regarding eligibility criteria for Indian Promoters and Foreign Promoters, foreign investment safeguards, special purpose vehicles (SPVs), approval for Transfer of shares, amalgamation of insurance companies with non-insurance companies, processing fees for applications, name of insurance companies, forms and application procedures, and other consequential and clarificatory amendments. The amendments are also intended to support ease of doing business, simplification of regulatory processes, reduction of compliance costs, enhancement of operational clarity, facilitation of capital infusion. 

Amendments are proposed in definitions relating to ‘Foreign Promoter’, ‘Indian Promoter’ and ‘Special Purpose Vehicle’. The proposed amendments seek to ensure consistency, remove interpretational ambiguities, strengthen regulatory oversight and put in place safeguard mechanisms in view of increase in limit of FDI. Further, the existing framework permits SPVs to act as promoter. The proposed amendment requires applicants to demonstrate the necessity of SPV structures while extending SPV recognition to eligible foreign incorporated entities from Financial Action Task Force (FATF) compliant jurisdictions.

The regulator has been emphasising on rationalising the expenses of management by the insurers to increase affordability of insurance premium at the end of policyholders and also to ensure growth and development of insurance companies as well. To facilitate the same, it is proposed to rationalise various fees payable by insurers. Under processing fee for Amalgamation Applications, current regulations require payment of fee by each of the insurer at the rate of 1/10th of Gross Premium, subject to minimum of Rs 50 lakh and maximum of Rs 5 crore, payable separately by each insurer. It is proposed to reduce the said fees to a fixed amount of Rs 10 lakh, payable by each of the transacting parties. Under processing fee for Transfer of Shares Application, in case of transfer of more than 50% equity, the existing regulations stipulates application fee at Rs 50 lakh. The same is proposed to be reduced to Rs 10 lakh.

The regulator has been emphasizing the need to rationalize insurers' management expenses to improve the affordability of insurance premiums for policyholders, while also supporting the growth and development of insurance companies. To facilitate the same, it is proposed to rationalize certain fees payable by insurers. With respect to the processing fee for amalgamation applications, the current regulations require each insurer to pay a processing fee of one-tenth of its gross premium, subject to a minimum of Rs 50 lakh and a maximum of Rs 5 crore. It is proposed to replace this with a fixed fee of Rs 10 lakh payable by each transacting party. Similarly, for applications involving the transfer of more than 50% of an insurer's equity share capital, the existing processing fee of Rs 50 lakh is proposed to be reduced to Rs 10 lakh.

The SBSR Act has introduced stipulations with regard to the name of the insurer i.e. the name of the insurer shall contain ‘insurance’, ‘assurance’ or ‘reinsurance’ word in it. In view of the same, it is proposed to introduce a new Regulation 56A relating to name of insurers. It also provides the transitional timeline for existing insurers and prior approval requirement for change in name of insurers. Meanwhile, the Authority invites comments from insurers, promoters, investors, professional bodies, legal experts, policyholders, and all other stakeholders on the proposed amendments on or before July 06, 2026.
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