**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 come into effect from April 1, 2026.
With this move, the IRDAI emphasizes adopting a zero-tolerance approach toward fraud. It mandates the implementation of an effective risk management framework aimed at deterring, detecting, and addressing fraudulent activities within the insurance sector.
**Board-Approved Anti-Fraud Policy**
As part of the new requirements, insurance firms must adopt a board-approved anti-fraud policy. This policy should outline key red flag indicators and define robust procedures for preventing, identifying, reporting, and remedying instances of fraud.
The intent behind this policy is to strengthen the industry’s defenses against fraud and to ensure that all stakeholders have the necessary tools to combat such activities efficiently and effectively.
**Formation of Fraud Monitoring Committee**
In addition to the anti-fraud policy, the IRDAI has mandated the formation of a Fraud Monitoring Committee (FMC) within insurance companies. The FMC will be responsible for overseeing and managing risks related to fraud, ensuring continuous vigilance and timely response to fraud-related issues.
This directive forms part of IRDAI’s broader efforts to equip all participants in the insurance ecosystem with effective strategies and mechanisms to safeguard against fraud, ultimately enhancing the integrity and trustworthiness of the industry.
https://www.newsbytesapp.com/news/business/irdai-mandates-insurance-firms-to-adopt-anti-fraud-policy/story
