The Insurance Regulatory and Development Authority of India (IRDAI) has directed insurers to link remuneration packages of MDs, CEOs and other senior management to customer-centric outcomes and overall financial health of the company.
In a circular on remuneration to key management persons (KMPs), the regulator has outlined the ‘parameters forming the basis of remuneration package (including incentives) of key managerial personnel which include to customer-centric outcomes such as claim responsiveness and grievance redressal.
Other parameters
The other key parameters are financial soundness, products’ performance, claim responsiveness, timely grievance redressal and removal of dark patterns from websites of insurers and their distributors.
The IRDAI (Corporate Governance for Insurers) Regulations, 2024 have also been amended to give effect to the new guidelines immediately.
Ajay Seth, Chairman, IRDAI
“Evolving expectations of customers and needs of the economy require us to place greater emphasis on measurable customer outcomes, transparency in decision-making, responsiveness, and sustainable value creation. Accordingly, the revised performance framework will move beyond traditional operational and financial metrics to include a stronger focus on customer-centric and governance-oriented outcomes,” Ajay Seth, Chairman, IRDAI, said in a statement on Tuesday.
The guideline also mandates disclosure of the performance of insurers in respect of parameters adopted for remuneration of all KMPs.
Performance framework
The updated performance framework, while laying emphasis on customer outcome orientation further empowers Boards to emphasise improvement in customer satisfaction and experience indicators, timely resolution of claims and grievances, reduction in repeat complaints and service failures, and delivery of fair, transparent, and customer-friendly processes.
Products’ performance parameters will detail features, inclusion & exclusions, FAQs, premium rate increase, sale and exit performance and returns. Claim responsiveness will bring transparency on time efficiency, nature of settlement, and value proportion of the settlement.
Grievance redressal parameters seek to enhance transparency by mandating a distinction between service requests and grievances, and disclosure of time taken. While some mandated disclosures have to be made quarterly, some are also required on monthly basis, in an ‘easy to access’ and ‘easy to understand’ manner on the company’s website without seeking personal details including phone number of visitors
Sharing information of multiple performance parameters of KMPs and enhanced Board oversight will strengthen governance and compliance practices.
Refinement and revisions related to reducing expense of management, promoting rural and social obligations and boosting coverage of Government promoted schemes such as PMJJBY and PMSBY will be taken up in the proposed revision of respective regulations and master circulars.
“Insurer leadership commitment will be critical in ensuring that these principles are embedded across all levels of the organization. We are confident that, through collective effort and accountability, we will strengthen trust in the sector and deliver greater value to policyholders, IRDAI Chairman said.
The revised performance framework will move beyond traditional operational and financial metrics to include a stronger focus on customer-centric and governance-oriented outcomes.Ajay Seth,Chairman, IRDAI
Published on May 26, 2026