Ease of doing business to enhancing oversight: Proposed reforms by IRDAI in the Corporate Agent Regulations
– Khewan Sonchhatra, Executive | corplaw@vinodkothari.com
Several amendments were introduced to the Insurance Act, 1938, the Life Insurance Corporation Act, 1956, and the Insurance Regulatory and Development Authority Act, 1999 through the Sabki Bima Sabki Suraksha Act, 2025. These amendments primarily aim to liberalise foreign investment norms, reduce capital requirements, strengthen regulatory oversight of market participants, and enhance measures for the protection of policyholders’ interests[1].
Now, IRDAI has issued a consultation paper proposing amendments to the regulations governing insurance intermediaries. The CP aims at several objectives including simplifying regulatory requirements, promoting ease of doing business, strengthening accountability and transparency, and enhance policyholder protection.
Key proposals are:
1. Shift from recurring renewals to perpetual registration framework
The following amendments call for substitution of the current framework involving a 3-year renewal exercise by a perpetual registration framework involving payment of an annual fee:
| Regulation | Existing Provision | Proposed Amendment |
| Regulation 10 – Validity of Registration | A Certificate of Registration was valid for a period of three years and required renewal before expiry | Registration will remain valid indefinitely, subject to payment of annual fees and unless surrendered, suspended or cancelled by the Authority. |
| Regulation 11 – Procedure for Issuance of Fresh Certificate to Existing Corporate Agents | Regulation 11 dealt with the renewal of registration by Corporate Agents upon expiry of the three-year registration period. Renewal applications were required to be filed before expiry along with the prescribed renewal fee. | The entire regulation is substituted. Existing Corporate Agents will now apply for a fresh certificate of registration before expiry of their current certificate and pay the applicable annual fee. Once granted, the fresh certificate will operate under the perpetual registration regime.It means that all the existing corporate agents have to compulsorily apply for fresh registration to get covered under the new perpetual regime.
VKCo comment: Given that existing corporate agents are validly registered, there may not be a need for a provision requiring fresh registration. A simple transitional provision requiring payment of annual fee once the renewal period is over, would have sufficed. |
| Regulation 12 – Registration not granted | The regulation contained references to refusal of registration as well as refusal of renewal of registration. | References to “renewal” and “renew” are omitted |
| Regulation 13 – Effect of Refusal | The regulation referred to refusal of registration as well as refusal of renewal of registration. | The words “of a renewal thereof” are omitted. |
| Regulation 4(3) Application fee | Rs. 10000 at the time of application and Rs. 25000 upon communication of grant of registration by the authorityand Rs. 25000 for renewal of Registration. | Rs. 10000 at the time of applicationand further payment of annual fee on a yearly basis as per Schedule VI. |
2. Simplification of Regulatory Processes and Reduction of Compliance Burden
| Regulation 7(3)(c),(d), (e) Formalities relating to specified persons of corporate agents | Every Specified Person engaged by a Corporate Agent was required to obtain an IRDAI-issued certificate, valid for 3 years, before soliciting and procuring insurance business. The regulations also prescribed the process for issuance, transfer (switching between Corporate Agents) and migration of such certificates. | Clauses (c), (d) and (e) are proposed to be omitted.
These requirements are proposed to be omitted. |
| Regulation 22(5) – Certificate Number Requirement | Corporate Agents shall disclose details of Specified Persons along with their IRDAI-issued certificate numbers while reporting office and personnel details to the Authority. | The words “along with their certificate number issued by the Authority” are omitted.
The amendment removes the requirement to furnish the certificate numbers of Specified Persons to IRDAI, thereby simplifying reporting obligations and reducing procedural compliance |
3. Strengthening accountability and oversight of Specified Personnel, Point of Sales Personnel and Authorised Verifier
| Regulation 14(v) – Number of Specified Persons[2] | The Corporate Agent was required to solicit and procure a reasonable number of insurance policies commensurate with its resources and the number of Specified Persons employed by it. The requirement was assessed at the entity level | Each branch office must employ Specified Persons commensurate with the volume of business handled by that branch, including members enrolled under group policies. Further, every branch must have at least one Specified Person. |
| Regulation 14(vi) – Policy-wise Tagging of Sales Personnel | The existing Regulation requires the Corporate Agent to maintain records in the format specified by IRDAI containing policy-wise and specified person-wise details, wherein every policy solicited by the Corporate Agent is tagged to the concerned Specified Person. The Corporate Agent is also required to provide access to such records to IRDAI. | Changes:● Expansion of coverage from only specified person to specified person or POSPs[3].
● Mandatory capture of Aadhar/Pan details of the salesperson. ● Record the salesperson details in the policy document ● Traceability of the individual responsible for the sale |
| Regulation 14(x) – Periodic Training Requirement (INSERTION) | Specified Persons were required to undergo prescribed training before being permitted to solicit insurance business. However, there was no mandatory recurring training requirement after registration. | The Principal Officer and Specified Persons must complete at least 25 hours of theoretical and practical training from an approved institution every three years. |
| Regulation 14(xi) – Power to Impose Business Restrictions(INSERTION) | The regulations did not expressly empower IRDAI to impose business-specific conditions, restrictions or limits after grant of registration. | IRDAI may, in the interest of policyholders and orderly growth of insurance business, impose conditions, restrictions or limits on the business of a Corporate Agent either at the time of registration or subsequently. |
| Regulation 19(1) – Professional Indemnity Insurance | A newly registered Corporate Agent could be granted up to 12 months from the date of registration to obtain and submit the professional indemnity insurance[4] policy. | Every Corporate Agent shall have the professional indemnity insurance policy from its inception. |
| Regulation 25(4) – Qualification of Authorised Verifiers (INSERTION) | The regulations prescribed requirements relating to Authorised Verifiers but did not specifically provide a separate provision requiring a pre-recruitment test and practical training in the manner now proposed | A new sub-regulation is inserted requiring Authorised Verifiers to:● Pass a pre-recruitment examination conducted by an examination body nominated by IRDAI; and
● Complete practical training from an IRDAI-approved training institution |
4. Enhanced disclosure and transparency requirements
| Regulation 17 – Nomenclature of Corporate Agents and Associations | The regulations did not mandate the use of the words “Insurance” or “Assurance” in the name of Corporate Agents or their association. | Where the principal business of the entity is insurance intermediation as a Corporate Agent, the name must contain the word “Insurance” or “Assurance”. Similar requirements are introduced for associations of Corporate Agents. |
| Regulation 26(2) – Threshold for Enhanced Reporting | The corporate agent shall be responsible for all the acts and omissions of its principal officer, specified persons and other employees including violation of code of conduct specified under these regulations and liable to a penalty which may extend to one crore rupees under the provisions of Sec. 102 or the Ac | The threshold is increased from ₹1 crore to ₹10 crore. |
| Regulation 31(2) – Disclosure of Insurance Intermediation Revenue | Corporate Agents whose principal business was other than insurance intermediation were required to maintain segment-wise reporting capturing revenues from insurance intermediation and other income received from insurers. | Corporate Agents are now required to disclose revenues from insurance intermediation and other income/receipts from insurers through a separate schedule forming part of their financial statements and submit audited financial statements along with the auditor’s report to IRDAI by 30 September every year. |
| Regulation 31(4) – Disclosure by Large Corporate Agents (INSERTION) | The regulations did not specifically require Corporate Agents to disclose commission earned, related party transactions, profits or dividend repatriation based on a commission threshold. | A Corporate Agent earning more than ₹10 crore commission in a financial year must annually disclose:● Commission earned;
● Related Party Transactions (RPTs); ● Profits; and ● Dividend repatriated. These disclosures must be submitted to IRDAI and also published on the Corporate Agent’s website. VKCo comment: No particular format of the aforesaid disclosures has been provided. |
| Schedule AA – Undertaking for Foreign-Owned Corporate Agents | Required the insurance intermediary to:● Obtain prior IRDAI approval for dividend repatriation;
● Restrict payments to related parties to 10% of total expenses; ● Maintain specified Indian-residency requirements for leadership, directors and KMPs; and ● Bring in technological and managerial expertise. |
Requires the insurance intermediary to:● Submit quarterly details of related party transactions (RPTs) and annual audited financial statements to IRDAI;
● Place such disclosures on its website; and ● Ensure all RPTs are supported by proper agreements, approvals and documentation and comply with applicable laws |
5. Introduction of a proportionate annual fee and regulatory supervision framework
| Regulation 4(3) Application fee | Rs. 10000 at the time of application and Rs. 25000 upon communication of grant of registration by the authorityand Rs. 25000 for renewal of Registration. | Rs. 10000 at the time of application and further payment of annual fee as specified within 15 days of the of communication of grant of registration |
| Schedule V Clause III – Suspension or Cancellation without Notice (INSERTION) | The regulations permitted suspension or cancellation of registration in specified circumstances such as fraud, misconduct or other regulatory violations. However, there was no specific provision for suspension solely on account of non-payment of annual fees because the framework was based on registration and renewal. | A new provision is inserted under which registration shall be suspended without notice if the Corporate Agent fails to pay the annual fee within the prescribed timeline. The Corporate Agent may seek revocation of suspension by paying the annual fee together with an additional penalty of 10% within three months from the date of suspension. |
| Schedule VI – Introduction of Annual Fee Framework(INSERTION) | Corporate Agents were required to pay registration fees and renewal fees at prescribed intervals under the existing three-year registration framework. | A completely new annual fee regime is introduced. Every Corporate Agent must pay an annual fee equal to the higher of:● ₹10,000; or
● 1/25th of 1% (0.04%) of commission and other receipts received from insurers during the preceding financial year. Late payment attracts penalties and continued non-payment may result in suspension or cancellation of registration. |
[1] https://vinodkothari.com/2025/12/major-amendments-in-insurance-act-2025/
[2] Specified Person means an employee of a Corporate Agent who is responsible for soliciting and procuring insurance business on behalf of a corporate agent and shall have fulfilled the requirements of qualification, training and passing of examination as specified in these regulations. A Specified Person is the employee or representative of a Corporate Agent who actually sells insurance policies to customers
[3] Point of Sales Person (POSP) means an individual who has the prescribed qualifications, has completed the required training and examination, and is authorized to solicit and market only those insurance products specified by IRDAI. As defined in reg 14(vi)
[4] Professional Indemnity Insurance (PII) is an insurance policy that protects an intermediary against financial losses arising from errors, omissions, negligence, misrepresentation or professional mistakes committed while rendering professional services.
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