Indian Government Proposes Strengthened Insurance Law Enforcement Powers

The proposed amendments to the insurance law — Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill, 2025 — significantly strengthen the enforcement and supervisory powers of the Insurance Regulatory and Development Authority of India (IRDAI), giving it wider authority to crack down on violations by various insurance intermediaries. Under the revised provisions, the IRDAI Chairperson will be empowered to order searches, seizures and inspections if there is reason to believe that insurers and related entities have failed to produce documents, are withholding information relevant to an investigation, or are likely to tamper with records. These powers can be invoked in cases involving suspected violations of the law, illegal payment of commissions or rebates, or attempts to falsify or destroy books, accounts, vouchers, survey reports or other records. Insurance intermediaries include agents, brokers, corporate agents like banks, NBFCs, fintechs, and other companies distributing insurance products, web aggregators like online platforms that compare and sell insurance policies, third-party administrators (TPAs), who manage health insurance claims and services, surveyors and loss assessors and insurance marketing firms (IMFs).