The Insurance Regulatory and Development Authority of India (IRDAI) has issued a new circular that could improve transparency and accountability across the insurance industry.
IRDAI now wants insurance companies to link the incentives and variable pay of their Key Management Persons (KMPs) to factors that directly affect customers, including claim responsiveness, grievance handling and product performance.
Why is this important?
When senior management receives rewards based mainly on business growth, the focus can naturally shift towards selling more policies.
IRDAI’s latest move encourages insurance companies to also focus on:
- Faster claim handling
- Better customer service
- Effective grievance resolution
- Improved product performance
- Greater transparency
This means the interests of insurance company management and policyholders become more closely aligned.
Insurance Companies must publish more information
The circular requires insurance companies to disclose important performance information on their websites in a manner that is easy to access and easy to understand. The information should be available without asking visitors to provide personal details.
For policyholders, this could make it easier to compare insurers before buying a policy.
What information will be available?
1. Claim Responsiveness
Insurance companies will need to disclose how quickly they handle claims.
The disclosures will include:
- Claims settled within 15 days
- Claims settled within 30 days
- Claims settled within 60 days
- Claims taking longer than 60 days
- Claims that remain unsettled
The regulator has specifically stated that claim timelines should be measured from the date the claim is filed, rather than from the date all documents are submitted.
As a health insurance customer, this could provide a clearer picture of how responsive a company is when a claim arises.
2. Grievance Resolution Performance
Insurance companies will also need to disclose how efficiently they resolve customer complaints.
The disclosures will show:
- Complaints resolved within 15 days
- Complaints resolved within 30 days
- Complaints resolved after 30 days
- Complaints that remain unresolved
This information can help customers identify companies that take complaints seriously.
3. Product Information in simple format
Companies will be required to provide detailed information about their products, including:
- Key features
- Premiums
- Inclusions and exclusions
- Required documents
- Claim requirements
- Frequently asked questions
This can make it easier for customers to understand what they are buying before purchasing a policy.
4. Transparency around costs and commissions
The circular also requires disclosure of commission-related policies and other product-related information.
Greater transparency can help customers make more informed decisions.
What does this mean for you as a Health Insurance customer?
If implemented effectively, the circular could benefit policyholders in several ways:
Potential Benefit | What does it mean for you? |
Better accountability | Senior management becomes responsible for customer outcomes, not just sales growth |
More transparency | Easier access to claim and complaint performance data |
Faster claim focus | Management incentives become linked to claim responsiveness |
Better service standards | Companies may invest more in customer support and grievance handling |
Easier comparison | Customers can compare insurers using publicly available information |
The Bigger Picture
One of the biggest challenges in health insurance has always been the gap between what customers expect and what they experience during claims.
This circular attempts to reduce that gap by making customer-centric performance metrics a part of how insurance company leaders are evaluated and rewarded.
While the real impact will become clear only after companies start publishing the required information, the direction is encouraging.
Are you looking for the best health insurance advisor?
Greater transparency is good news. However, it involves considerable effort to evaluate and finalise the right health insurance policy.
At Zenith Finserve, we follow a structured and research-driven approach to evaluate health insurance plans. We consider your age, health condition, family needs, lifestyle, medical history, policy features, exclusions, claim processes, and insurance companyās service standards before making a suggestion.
This helps you choose cover that is appropriate for your situation and can support you when you need it most.
Source – IRDAI Circular on Remuneration to Key Management Persons (KMPs) dated 25-May-2026
