The Insurance Regulatory and Development Authority Act, 1999
Administered Ministry: Ministry of Finance / Department of Financial Services
Section
Section 16 Constitution of Fund.
(1) There shall be constituted a fund to be called "the Insurance Regulatory and Development Authority Fund" and there shall be credited thereto---
(a) all Government grants, fees and charges received by the Authority;
(b) all sums received by the Authority from such other source as may be decided upon by the Central Government;
1* * * * *
(2) The Fund shall be applied for meeting---
(a) the salaries, allowances and other remuneration of the members, officers and other employees of the Authority;
(b) the other expenses of the Authority in connection with the discharge of its functions and for the purposes of this Act 2[and the Insurance Act, 1938 (4 of 1938)];
2[(c) the capital expenditure, as per annual capital expenditure plan approved by the Authority.]
2[(3) The Authority shall constitute a Reserve Fund and twenty-five per cent. of the annual surplus of the Fund in any year shall be credited to such Reserve Fund and such fund shall not exceed the total of annual expenditure of preceding three financial years.
(4) After incurring all the expenses referred to in sub-section (2) and transfer to Reserve Fund as specified in sub-section (3), the surplus of the Fund shall be transferred to the Consolidated Fund of India.
Explanation.---For the purposes of this section, the expression "Reserve Fund" means a fund to hold the surplus of the Fund, in the form and manner specified in sub-section (3) of section 16.]
(a) all Government grants, fees and charges received by the Authority;
(b) all sums received by the Authority from such other source as may be decided upon by the Central Government;
1* * * * *
(2) The Fund shall be applied for meeting---
(a) the salaries, allowances and other remuneration of the members, officers and other employees of the Authority;
(b) the other expenses of the Authority in connection with the discharge of its functions and for the purposes of this Act 2[and the Insurance Act, 1938 (4 of 1938)];
2[(c) the capital expenditure, as per annual capital expenditure plan approved by the Authority.]
2[(3) The Authority shall constitute a Reserve Fund and twenty-five per cent. of the annual surplus of the Fund in any year shall be credited to such Reserve Fund and such fund shall not exceed the total of annual expenditure of preceding three financial years.
(4) After incurring all the expenses referred to in sub-section (2) and transfer to Reserve Fund as specified in sub-section (3), the surplus of the Fund shall be transferred to the Consolidated Fund of India.
Explanation.---For the purposes of this section, the expression "Reserve Fund" means a fund to hold the surplus of the Fund, in the form and manner specified in sub-section (3) of section 16.]
1. Clause (c) omitted by Act 5 of 2015, s. 107 (w.e.f. 26-12-2014).
2. Ins. by Act 40 of 2025, s. 92 (w.e.f. 05-02-2026).
2. Ins. by Act 40 of 2025, s. 92 (w.e.f. 05-02-2026).
Section 16A Constitution of Policyholders’ Education and Protection Fund.
1[16A. Constitution of Policyholders' Education and Protection Fund.---(1) The Authority shall constitute a fund to be called the Policyholders' Education and Protection Fund.
(2) There shall be credited to the Policyholders' Education and Protection Fund the following amounts, namely:---
(a) any grants and donations given to the Policyholders' Education and Protection Fund by the Central Government, State Governments, the Authority, companies or any other institutions for the purposes of the Policyholders' Education and Protection Fund;
(b) the sums realised by way of penalties by the Authority under this Act or the Insurance Act, 1938 (4 of 1938) or rules and regulations thereunder; and
(c) such other sums as may be specified by the regulations.
(3) The Policyholders' Education and Protection Fund shall be administered and utilised by the Authority for education of policyholders and protection of the interests of policyholders in the manner and for such other purposes as may be specified by the regulations.]
(2) There shall be credited to the Policyholders' Education and Protection Fund the following amounts, namely:---
(a) any grants and donations given to the Policyholders' Education and Protection Fund by the Central Government, State Governments, the Authority, companies or any other institutions for the purposes of the Policyholders' Education and Protection Fund;
(b) the sums realised by way of penalties by the Authority under this Act or the Insurance Act, 1938 (4 of 1938) or rules and regulations thereunder; and
(c) such other sums as may be specified by the regulations.
(3) The Policyholders' Education and Protection Fund shall be administered and utilised by the Authority for education of policyholders and protection of the interests of policyholders in the manner and for such other purposes as may be specified by the regulations.]
1. Ins. by Act 40 of 2025, s. 93 (w.e.f. 05-02-2026).
Section 17 Accounts and audit.
(1) The Authority shall maintain proper accounts and other relevant records and prepare an annual statement of accounts in such form as may be prescribed by the Central Government in consultation with the Comptroller and Auditor-General of India.
(2) The accounts of the Authority shall be audited by the Comptroller and Auditor-General of India at such intervals as may be specified by him and any expenditure incurred in connection with such audit shall be payable by the Authority to the Comptroller and Auditor-General.
(3) The Comptroller and Auditor-General of India and any other person appointed by him in connection with the audit of the accounts of the Authority shall have the same rights, privileges and authority in connection with such audit as the Comptroller and Auditor-General generally has in connection with the audit of the Government accounts and, in particular, shall have the right to demand the production of books of account, connected vouchers and other documents and papers and to inspect any of the offices of the Authority.
(4) The accounts of the Authority as certified by the Comptroller and Auditor-General of India or any other person appointed by him in this behalf together with the audit report thereon shall be forwarded annually to the Central Government and that Government shall cause the same to be laid before each House of Parliament.
(2) The accounts of the Authority shall be audited by the Comptroller and Auditor-General of India at such intervals as may be specified by him and any expenditure incurred in connection with such audit shall be payable by the Authority to the Comptroller and Auditor-General.
(3) The Comptroller and Auditor-General of India and any other person appointed by him in connection with the audit of the accounts of the Authority shall have the same rights, privileges and authority in connection with such audit as the Comptroller and Auditor-General generally has in connection with the audit of the Government accounts and, in particular, shall have the right to demand the production of books of account, connected vouchers and other documents and papers and to inspect any of the offices of the Authority.
(4) The accounts of the Authority as certified by the Comptroller and Auditor-General of India or any other person appointed by him in this behalf together with the audit report thereon shall be forwarded annually to the Central Government and that Government shall cause the same to be laid before each House of Parliament.
Section 18 Power of Central Government to issued directions.
(1) Without prejudice to the foregoing provisions of this Act, the Authority shall, in exercise of its powers or the performance of its functions under this Act, be bound by such directions on questions of policy, other than those relating to technical and administrative matters, as the Central Government may give in writing to it from time to time:
Provided that the Authority shall, as far as practicable, be given an opportunity to express its views before any direction is given under this sub-section.
(2) The decision of the Central Government, whether a question is one of policy or not, shall be final.
Provided that the Authority shall, as far as practicable, be given an opportunity to express its views before any direction is given under this sub-section.
(2) The decision of the Central Government, whether a question is one of policy or not, shall be final.
Section 19 Power of Central Government to supersede Authority.
(1) If, at any time the Central Government is of the opinion,---
(a) that, on account of circumstances beyond the control of the Authority, it is unable to discharge the functions or perform the duties imposed on it by or under the provisions of this Act; or
(b) that the Authority has persistently defaulted in complying with any direction given by the Central Government under this Act or in the discharge of the functions or performance of the duties imposed on it by or under the provisions of this Act and as a result of such default the financial position of the Authority or the administration of the Authority has suffered; or
(c) that circumstances exist which render it necessary in the public interest so to do,
the Central Government may, by notification and for reasons to be specified therein, supersede the Authority for such period, not exceeding six months, as may be specified in the notification and appoint a person to be the Controller of Insurance under section 2B of the Insurance Act, 1938 (4 of 1938), if not already done:
Provided that before issuing any such notification, the Central Government shall give a reasonable opportunity to the Authority to make representations against the proposed supersession and shall consider the representations, if any, of the Authority.
(2) Upon the publication of a notification under sub-section (1) superseding the Authority,--
(a) the Chairperson and other members shall, as from the date of supersession, vacate their offices as such;
(b) all the powers, functions and duties which may, by or under the provisions of this Act, be exercised or discharged by or on behalf of the Authority shall, until the Authority is reconstituted under sub-section (3), be exercised and discharged by the Controller of Insurance; and
(c) all properties owned or controlled by the Authority shall, until the Authority is reconstituted under sub-section (3), vest in the Central Government.
(3) On or before the expiration of the period of supersession specified in the notification issued under sub-section (1), the Central Government shall reconstitute the Authority by a fresh appointment of its Chairperson and other members and in such case any person who had vacated his office under clause (a) of sub-section (2) shall not be deemed to be disqualified for reappointment.
(4) The Central Government shall cause a copy of the notification issued under sub-section (1) and a full report of any action taken under this section and the circumstances leading to such action to be laid before each House of Parliament at the earliest.
(a) that, on account of circumstances beyond the control of the Authority, it is unable to discharge the functions or perform the duties imposed on it by or under the provisions of this Act; or
(b) that the Authority has persistently defaulted in complying with any direction given by the Central Government under this Act or in the discharge of the functions or performance of the duties imposed on it by or under the provisions of this Act and as a result of such default the financial position of the Authority or the administration of the Authority has suffered; or
(c) that circumstances exist which render it necessary in the public interest so to do,
the Central Government may, by notification and for reasons to be specified therein, supersede the Authority for such period, not exceeding six months, as may be specified in the notification and appoint a person to be the Controller of Insurance under section 2B of the Insurance Act, 1938 (4 of 1938), if not already done:
Provided that before issuing any such notification, the Central Government shall give a reasonable opportunity to the Authority to make representations against the proposed supersession and shall consider the representations, if any, of the Authority.
(2) Upon the publication of a notification under sub-section (1) superseding the Authority,--
(a) the Chairperson and other members shall, as from the date of supersession, vacate their offices as such;
(b) all the powers, functions and duties which may, by or under the provisions of this Act, be exercised or discharged by or on behalf of the Authority shall, until the Authority is reconstituted under sub-section (3), be exercised and discharged by the Controller of Insurance; and
(c) all properties owned or controlled by the Authority shall, until the Authority is reconstituted under sub-section (3), vest in the Central Government.
(3) On or before the expiration of the period of supersession specified in the notification issued under sub-section (1), the Central Government shall reconstitute the Authority by a fresh appointment of its Chairperson and other members and in such case any person who had vacated his office under clause (a) of sub-section (2) shall not be deemed to be disqualified for reappointment.
(4) The Central Government shall cause a copy of the notification issued under sub-section (1) and a full report of any action taken under this section and the circumstances leading to such action to be laid before each House of Parliament at the earliest.
Section 20 Furnishing of returns, etc., to Central Government.
(1) The Authority shall furnish to the Central Government at such time and in such form and manner as may be prescribed, or as the Central Government may direct to furnish such returns, statements and other particulars in regard to any proposed or existing programme for the promotion and development of the insurance industry as the Central Government may, from time to time, require.
(2) Without prejudice to the provisions of sub-section (1), the Authority shall, within nine months after the close of each financial year, submit to the Central Government a report giving a true and full account of its activities including the activities for promotion and development of the insurance business during the previous financial year.
(3) Copies of the reports received under sub-section (2) shall be laid, as soon as may be after they are received, before each House of Parliament.
(2) Without prejudice to the provisions of sub-section (1), the Authority shall, within nine months after the close of each financial year, submit to the Central Government a report giving a true and full account of its activities including the activities for promotion and development of the insurance business during the previous financial year.
(3) Copies of the reports received under sub-section (2) shall be laid, as soon as may be after they are received, before each House of Parliament.
Section 21 Chairperson, members, officers and other employees of Authority to be public servants.
The Chairperson, members, officers and other employees of the Authority shall be deemed, when acting or purporting to act in pursuance of any of the provisions of this Act, to be public servants within the meaning of section 21 of the Indian Penal Code (45 of 1860).
Section 22 Protection of action taken in good faith.
No suit, prosecution or other legal proceedings shall lie against the Central Government or any officer of the Central Government or any member, officer or other employee of the Authority for anything which is in good faith done or intended to be done under this Act or the rules or regulations made thereunder:
Provided that nothing in this Act shall exempt any person from any suit or other proceedings which might, apart from this Act, be brought against him.
Provided that nothing in this Act shall exempt any person from any suit or other proceedings which might, apart from this Act, be brought against him.
Section 23 Delegation of powers.
1[(1) The Authority may, for the efficient discharge of its functions under this Act, by a general or special order in writing by notification, delegate to the Chairperson or any other member or any officer of the Authority, subject to such conditions or restrictions, if any, as may be specified in the order, such of its powers and functions under this Act, except the power to make regulations and the power to register an insurer, as it may deem necessary or expedient.]
(2) The Authority may, by a general or special order in writing, also form committees of the members and delegate to them the powers and functions of the Authority as may be specified by the regulations.
(2) The Authority may, by a general or special order in writing, also form committees of the members and delegate to them the powers and functions of the Authority as may be specified by the regulations.
1. Subs. by Act 40 of 2025, s. 94 (w.e.f. 05-02-2026).
Section 23A Powers of Authority not to apply to International Financial Services Centre.
1[23A. Powers of Authority not to apply to International Financial Services Centre.--- Notwithstanding anything contained in any other law for the time being in force, the powers exercisable by the Authority under this Act,---
(a) shall not extend to an International Financial Services Centre set up under sub-section (1) of section 18 of the Special Economic Zones Act, 2005 (28 of 2005);
(b) shall be exercisable by the International Financial Services Centres Authority established under sub-section (1) of section 4 of the International Financial Services Centres Authority Act, 2019,
in so far as regulation of financial products, financial services and financial institutions that are permitted in the International Financial Services Centres are concerned.]
(a) shall not extend to an International Financial Services Centre set up under sub-section (1) of section 18 of the Special Economic Zones Act, 2005 (28 of 2005);
(b) shall be exercisable by the International Financial Services Centres Authority established under sub-section (1) of section 4 of the International Financial Services Centres Authority Act, 2019,
in so far as regulation of financial products, financial services and financial institutions that are permitted in the International Financial Services Centres are concerned.]
1. Ins. by Act 50 of 2019, s. 33 and the second Schedule (w.e.f. 1-10-2020).
Section 24 Power to make rules. 7 docs
(1) The Central Government may, by notification, make rules for carrying out the provisions of this Act.
(2) In particular, and without prejudice to the generality of the foregoing power, such rules may provide for all or any of the following matters, namely:--
(a) the salary and allowances payable to, and other terms and conditions of service of, the members other than part-time members under sub-section (1) of section 7;
(b) the allowances to be paid to the part-time members under sub-section (2) of section 7;
(c) such other powers that may be exercised by the Authority under clause (q) of sub-section (2) of section 14;
(d) the form of annual statement of accounts to be maintained by the Authority under sub-section (1) of section 17;
(e) the form and manner in which and the time within which returns and statements and particulars are to be furnished to the Central Government under sub-section (1) of section 20;
(f) the matters under sub-section (5) of section 25 on which the Insurance Advisory Committee shall advise the Authority;
(g) any other matter which is required to be, or may be, prescribed, or in respect of which provision is to be or may be made by rules.
(2) In particular, and without prejudice to the generality of the foregoing power, such rules may provide for all or any of the following matters, namely:--
(a) the salary and allowances payable to, and other terms and conditions of service of, the members other than part-time members under sub-section (1) of section 7;
(b) the allowances to be paid to the part-time members under sub-section (2) of section 7;
(c) such other powers that may be exercised by the Authority under clause (q) of sub-section (2) of section 14;
(d) the form of annual statement of accounts to be maintained by the Authority under sub-section (1) of section 17;
(e) the form and manner in which and the time within which returns and statements and particulars are to be furnished to the Central Government under sub-section (1) of section 20;
(f) the matters under sub-section (5) of section 25 on which the Insurance Advisory Committee shall advise the Authority;
(g) any other matter which is required to be, or may be, prescribed, or in respect of which provision is to be or may be made by rules.
Section 25 Establishment of Insurance Advisory Committee.
(1) The Authority may, by notification, establish with effect from such date as it may specify in such notification, a Committee to be known as the Insurance Advisory Committee.
(2) The Insurance Advisory Committee shall consist of not more than twenty-five members excluding ex officio members to represent the interests of commerce, industry, transport, agriculture, consumer fora, surveyors, agents, intermediaries, organisations engaged in safety and loss prevention, research bodies and employees' association in the insurance sector.
(3) The Chairperson and the members of the Authority shall be the ex officio Chairperson and ex officio members of the Insurance Advisory Committee.
(4) The objects of the Insurance Advisory Committee shall be to advise the Authority on matters relating to the making of the regulations under section 26.
(5) Without prejudice to the provisions of sub-section (4), the Insurance Advisory Committee may advise the Authority on such other matters as may be prescribed.
(2) The Insurance Advisory Committee shall consist of not more than twenty-five members excluding ex officio members to represent the interests of commerce, industry, transport, agriculture, consumer fora, surveyors, agents, intermediaries, organisations engaged in safety and loss prevention, research bodies and employees' association in the insurance sector.
(3) The Chairperson and the members of the Authority shall be the ex officio Chairperson and ex officio members of the Insurance Advisory Committee.
(4) The objects of the Insurance Advisory Committee shall be to advise the Authority on matters relating to the making of the regulations under section 26.
(5) Without prejudice to the provisions of sub-section (4), the Insurance Advisory Committee may advise the Authority on such other matters as may be prescribed.
Section 26 Power to make regulations. 1 docs
1[(1) The Authority may, in consultation with the Insurance Advisory Committee, by notification make regulations consistent with the provisions of this Act and the rules made thereunder, to carry out the purposes of this Act and while making the regulations shall ensure transparency by---
(a) publishing draft regulations along with such other details as may be specified on its website and inviting public comments for a specified period prior to issuing such regulations;
(b) publishing a general statement of its response to the public comments, not later than the date of notification of the regulations; and
(c) periodically reviewing such regulations:
Provided that if the Authority is of the opinion that certain regulations are required to be made or existing regulations to be amended urgently in the public interest or the subject matter of the regulation relates solely to the internal functioning of the Authority, it may dispense with the condition of publishing draft regulations and record the reason for doing so:
Provided further that if the Authority decides to approve regulations in a form substantially different from the proposed regulations other than changes made in consideration of comments received by it, it shall repeat the process mentioned in this sub-section.]
(2) In particular, and without prejudice to the generality of the foregoing power, such regulations may provide for all or any of the following matters, namely:---
(a) the time and places of meetings of the Authority and the procedure to be followed at such meetings including the quorum necessary for the transaction of business under sub-section (1) of section 10;
(b) the transaction of business at its meetings under sub-section (4) of section 10;
(c) the terms and other conditions of service of officers and other employees of the Authority under sub-section (2) of section 12;
(d) the powers and functions which may be delegated to committees of the members under sub-section (2) of section 23; and
(e) any other matter which is required to be, or may be, specified by regulations or in respect of which provision is to be or may be made by regulations.
(a) publishing draft regulations along with such other details as may be specified on its website and inviting public comments for a specified period prior to issuing such regulations;
(b) publishing a general statement of its response to the public comments, not later than the date of notification of the regulations; and
(c) periodically reviewing such regulations:
Provided that if the Authority is of the opinion that certain regulations are required to be made or existing regulations to be amended urgently in the public interest or the subject matter of the regulation relates solely to the internal functioning of the Authority, it may dispense with the condition of publishing draft regulations and record the reason for doing so:
Provided further that if the Authority decides to approve regulations in a form substantially different from the proposed regulations other than changes made in consideration of comments received by it, it shall repeat the process mentioned in this sub-section.]
(2) In particular, and without prejudice to the generality of the foregoing power, such regulations may provide for all or any of the following matters, namely:---
(a) the time and places of meetings of the Authority and the procedure to be followed at such meetings including the quorum necessary for the transaction of business under sub-section (1) of section 10;
(b) the transaction of business at its meetings under sub-section (4) of section 10;
(c) the terms and other conditions of service of officers and other employees of the Authority under sub-section (2) of section 12;
(d) the powers and functions which may be delegated to committees of the members under sub-section (2) of section 23; and
(e) any other matter which is required to be, or may be, specified by regulations or in respect of which provision is to be or may be made by regulations.
1. Subs. by Act 40 of 2025, s. 95, for sub-section (1) (w.e.f. 05-02-2026).
Section 27 Rules and regulations to be laid before Parliament.
Every rule and every regulation made under this Act shall be laid, as soon as may be after it is made, before each House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in making any modification in the rule or regulation or both Houses agree that the rule or regulation should not be made, the rule or regulation shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule or regulation.
Section 28 Application of other laws not barred.
The provisions of this Act shall be in addition to, and not in derogation of, the provisions of any other law for the time being in force.
Section 29 Power to remove difficulties.
(1) If any difficulty arises in giving effect to the provisions of this Act, the Central Government may, by order published in the Official Gazette, make such provisions not inconsistent with the provisions of this Act as may appear to be necessary for removing the difficulty:
Provided that no order shall be made under this section after the expiry of two years from the appointed day.
(2) Every order made under this section shall be laid, as soon as may be after it is made, before each House of Parliament.
Provided that no order shall be made under this section after the expiry of two years from the appointed day.
(2) Every order made under this section shall be laid, as soon as may be after it is made, before each House of Parliament.
Section 30 Amendment of Act 4 of 1938.
The Insurance Act, 1938 shall be amended in the manner specified in the First Schedule to this Act.
Section 31 Amendment of Act 31 of 1956.
The Life Insurance Corporation Act, 1956 shall be amended in the manner specified in the Second Schedule to this Act.
Section 32 Amendment of Act 57 of 1972.
The General Insurance Business (Nationalisation) Act, 1972 shall be amended in the manner specified in the Third Schedule to this Act.