**IRDAI Directs Insurers to Set Up Fraud Risk Management Framework**
*By Akash Pandey | Oct 12, 2025, 06:32 PM*
The Insurance Regulatory and Development Authority of India (IRDAI) has issued new directives requiring insurance companies, reinsurers, and distribution channels to establish a comprehensive framework for managing fraud-related risks. These guidelines will come into effect from April 1, 2026, signaling a stringent move towards combating fraud in the insurance sector.
**Zero-Tolerance Approach to Fraud**
The IRDAI has emphasized the need for a zero-tolerance approach toward fraud. Insurers are expected to implement an effective risk management framework that not only detects but also prevents and remedies fraudulent activities. This initiative aims to bolster the industry’s resilience against fraud and protect the interests of all stakeholders.
**Board-Approved Anti-Fraud Policy**
A key requirement under the new guidelines is that insurance companies must adopt a board-approved anti-fraud policy. This policy should clearly outline red flag indicators along with robust procedures designed to deter, detect, report, and address fraud. By institutionalizing such policies, the IRDAI seeks to ensure that companies are well-prepared to tackle fraud proactively.
**Formation of Fraud Monitoring Committee**
In addition to the anti-fraud policy, the IRDAI has mandated the creation of a Fraud Monitoring Committee (FMC) within insurance organizations. The FMC will be charged with overseeing and managing all fraud-related risks, thereby providing dedicated governance and strategic direction to fraud prevention efforts.
This directive represents IRDAI’s broader commitment to strengthening the insurance sector’s defenses against fraud and ensuring that all participants are equipped with the necessary tools and strategies to fight fraudulent activities effectively.
https://www.newsbytesapp.com/news/business/irdai-mandates-insurance-firms-to-adopt-anti-fraud-policy/story
