**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 are set to take effect from April 1, 2026.
**Zero-Tolerance Approach to Fraud**
IRDAI emphasizes adopting a zero-tolerance stance towards fraud within the insurance sector. To support this, all entities must implement an effective risk management framework aimed at deterring and addressing fraudulent activities.
**Board-Approved Anti-Fraud Policy**
As part of the mandate, insurance companies are required to adopt a board-approved anti-fraud policy. This policy should clearly outline red flag indicators and contain robust procedures to deter, prevent, detect, report, and remedy instances of fraud. The objective is to strengthen the industry’s defenses and equip all stakeholders with the necessary tools for combating fraud efficiently.
**Formation of Fraud Monitoring Committee**
In addition to the anti-fraud policy, IRDAI has mandated the establishment of a Fraud Monitoring Committee (FMC) within insurance organizations. The FMC will oversee and manage fraud-related risks, ensuring continuous vigilance and timely interventions when fraudulent activities are detected.
This move underscores IRDAI’s commitment to fostering a secure and transparent insurance ecosystem, empowering all participants with effective strategies to battle fraud and protect policyholders.
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*Stay tuned for more updates on regulatory changes in the insurance sector.*
https://www.newsbytesapp.com/news/business/irdai-mandates-insurance-firms-to-adopt-anti-fraud-policy/story
