The Ministry of Finance (MoF) on July 30, 2026, issued the Draft Indian Insurance Companies (Inquiry, Adjudication and Appeal) Rules, 2026.
The rules lay down a structured framework for handling contraventions by individuals in relation to Indian Insurance Companies. A complaint can be filed by an insurer in Form I either electronically or physically. Upon receipt, the adjudicating officer initiates an inquiry by issuing a show-cause notice (minimum 14 days) specifying the nature of the contravention. If the response is unsatisfactory, a hearing is scheduled where the person can appear personally or through an authorized representative and present evidence.
The adjudicating officer has powers similar to a civil court, including summoning individuals, examining evidence, and calling for documents. The inquiry process is flexible and not bound by strict rules of evidence. If the person fails to appear, the officer may proceed ex-parte. After evaluating evidence, the officer may impose penalties under the Act, providing written reasons, and must complete proceedings within six months.
While determining penalties, factors such as unfair gain, loss caused to the insurer, repetitive nature, and severity of the contravention are considered. The final order is communicated to both the concerned person and the insurer. Notices and orders can be served through multiple modes, including electronic means, post, or physical delivery.
An aggrieved party may file an appeal before the appellate authority within 30 days (extendable with valid reason). The appeal process includes submission of relevant documents, scrutiny, opportunity of hearing, and disposal within 60 days. The adjudicating officer or appellate authority may extend timelines for valid reasons, and all penalties collected are credited to the Consolidated Fund of India.
Objections or suggestions, if any, from persons likely to be affected may be addressed to the Secretary, Ministry of Finance, Department of Financial Services, Jeevan Deep Building, 3rd floor, Sansad Marg, New Delhi 110001. Objections or suggestions that may be received from persons likely to be affected with respect to the draft rules within the aforesaid period shall be considered by the Central Government.
[Notification No. G.S.R. 679(E)]
