India Issues Draft Insurance Inquiry Rules, Policyholder Fund Regulations

The Ministry of Finance has issued draft Indian Insurance Companies (Inquiry, Adjudication and Appeal) Rules, 2026, establishing a formal mechanism for handling complaints, inquiries, adjudication proceedings and appeals under the General Insurance Business (Nationalisation) Act, 1972. Companies may file complaints electronically, by speed‑post or in person; a show‑cause notice of at least 14 days must be issued before a formal inquiry. Adjudicating officers are granted powers comparable to civil courts, including summoning persons and examining evidence, and may impose penalties based on unfair gains or financial loss. The draft is open for public comment for 30 days.

The Insurance Regulatory and Development Authority of India (IRDAI) has published its response to stakeholder feedback on the draft Policyholders Education and Protection Fund (PEPF) Regulations, 2026. The response clarifies that operational matters such as contracts, grants and MoUs can be addressed through administrative orders, that investment income on the corpus will be used only for specified purposes and not added to the fund, and that the rights of eligible claimants may be preserved after transfer of undistributed disgorgement. It also confirms the approved use of technology infrastructure, outlines the committee’s composition and tenure, and details quorum, expenditure and financial‑statement publication provisions.