Insurance | October – December 2024
Regulatory Updates
Press Release on Information Security, 2024
The Insurance Regulatory and Development Authority of India (“IRDAI“) issued a press release on 18 October 2024 in relation to recent reports of data leaks from two insurers. The IRDAI stated that it considers data security including, inter alia, data breach and cyber-attacks on IT systems of insurance companies as a serious breach. The concerned insurers, inter alia, appointed an external IT company to undertake root cause analysis and also filed a criminal complaint with the law enforcement agencies. Additionally, the IRDAI instructed the concerned insurers to appoint an independent auditor to ensure that their IT systems are adequate to meet the scale and complexities of the operations.
The IRDAI also issued an advisory to all insurers to check their IT systems for vulnerabilities and take necessary steps to protect the policyholder’s data.
Draft IRDAI (Insurance Fraud Monitoring Framework) Guidelines, 2024
The IRDAI vide a circular dated 21 January 2013 notified the extant Insurance Fraud Monitoring Framework (“Framework“) to provide regulatory supervision and guidance to insurers to address and manage risks emanating from fraud. Thereafter, on 23 October 2024, the IRDAI issued the draft IRDAI (Insurance Fraud Framework) Guidelines, 2024 (“Draft Guidelines“). The Draft Guidelines have been drafted in view of the substantial change in the nature and intensity of fraud over the years since the notification of the Framework. The Draft Guidelines include insights from practices followed by other financial sector regulators and international best practices. The Draft Guidelines aim to enhance the sector’s resilience against fraud, foster a culture of integrity, protect policyholder’s interests, safeguard financial stability and maintain public trust.
The Draft Guidelines have proposed provisions for an enhanced framework that include, advanced measures for fraud detection, efficient fraud handling, robust fraud prevention, and other relevant aspects.
Draft IRDAI (Maintenance of Information by the Regulated Entities and Sharing of information by the Authority), Regulations, 2024
The IRDAI issued the draft IRDAI (Maintenance of Information by the Regulated Entities and Sharing of information by the Authority) Regulations, 2024 (“Draft Regulations“) on 30 October 2024 with the object to, inter alia, enable the insurers and intermediaries including insurance intermediaries to maintain all basic, relevant and necessary information and also to enable insurers to maintain data as required for their operations in electronic form and to ensure compliance with applicable law.
The Draft Regulations have unified three existing regulations i.e., IRDAI (Minimum Information Required for Investigation and Inspection) Regulations, 2020; Insurance Regulatory and Development Authority (Sharing of Confidential Information Concerning Domestic or Foreign Entity) Regulations, 2012 and IRDAI (Maintenance of Insurance Records) Regulations, 2015.
Exposure Draft of IRDAI (Regulatory Sandbox) (Amendment) Regulations, 2024
The IRDAI issued the exposure draft of the IRDAI (Regulatory Sandbox) (Amendment) Regulations, 2024 on 04 November 2024 (“Exposure Draft “) for amending the IRDAI (Sandbox Regulatory) Regulations, 2019. The objective of the Exposure Draft is, inter alia, to enhance ease of doing business and reduce compliance burden for stakeholders. The Exposure Draft provides that the proposed amendments are based on, inter alia, adoption of principle based approach, no hard coding of values and numbers and introduction of innovative ideas and new concepts. In view of the above, values/ numbers which were part of the IRDAI (Sandbox Regulatory) Regulations, 2019 such as minimum networth, fees, eligibility criteria, application form, experiment period, extension of time period of permission, allocated time, etc are proposed to be shifted to the master circular.
For more information contact:
Shubhangi Pathak
Practice Head – Insurance
shubhangi.pathak@veritaslegal.in
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