IRDAI Forces Insurers to Publish 3 Years of Executive Pay Parameters in Plain Language

On 25 May 2026, the Insurance Regulatory and Development Authority of India (IRDAI) issued circular Ref IRDAI/F&I/CIR/MISC/72/5/2026, titled "Remuneration to Key Management Persons (KMPs)". It does something unusual for a governance circular: it reaches past the boardroom and asks insurers to put three years of executive-pay logic on their public website, written so an ordinary policyholder can read it without handing over a phone number. For an industry that collects your premiums for 20 or 30 years before it ever pays a claim, that shift from private board minute to public disclosure matters more than its dry title suggests.

The Rule / Product

The 25 May 2026 circular is not a fresh regulation. It is an amendment to the existing Master Circular on Corporate Governance for Insurers 2024 (Ref IRDAI/F&I/CIR/MISC/82/5/2024, dated 22 May 2024), and it takes effect immediately from the date of issue. IRDAI has issued it using three distinct legal pegs: Section 34 of the Insurance Act 1938, Section 14 of the IRDA Act 1999, and Regulation 12 of the IRDAI (Corporate Governance for Insurers) Regulations 2024, which were notified on 21 March 2024. Section 34 of the Insurance Act 1938 is the long-standing power that lets the regulator issue directions to insurers in the interest of policyholders, and it is the backbone of most IRDAI circulars.

The amendment changes the corporate-governance rulebook in two concrete places. First, it replaces clauses 8.1(g) and 8.1(h) of the 2024 Master Circular. As rewritten, those two clauses now require insurers to document the parameters that form the basis of the remuneration packages, including all incentives, paid to the Managing Director, the Chief Executive Officer, every other director, and all Key Management Persons. The same clauses extend the disclosure net to payments made to group entities and related parties, closing a gap where pay could flow sideways to a parent or sister company rather than directly to a named executive.

Second, the circular inserts an entirely new clause 8.3, titled "Disclosure of insurers performance against parameters adopted for remuneration of all KMPs". This is the part aimed squarely at the public. Under clause 8.3, each insurer must disclose, on its own company website, how it actually performed against the remuneration parameters it adopted under para 9.2(d) of the governance framework, and it must show that performance for the preceding three years. The regulator attaches two usability conditions that are rare in Indian financial rule-making: the disclosure must be "easy to reach and easy to understand" for the public and policyholders, and the insurer may not force a visitor to submit personal details, such as a phone number, before showing the information. In plain terms, no gated page, no lead-capture form standing between a policyholder and the pay-performance record.

The table below separates what the 2024 Master Circular already required from what the 25 May 2026 amendment adds.

Why It Matters

Insurance is the one financial product where the buyer pays first and finds out whether the promise was real only years later, often at the worst possible moment. The IRDAI (irdai.gov.in) is the statutory custodian of that promise, and corporate governance is how it tries to keep the people running an insurer aligned with the people whose premiums fund it. The 25 May 2026 circular matters because it treats executive pay as a policyholder-protection issue, not merely a shareholder one.

Why does pay design belong to policyholders? Because the parameters that trigger an incentive shape behaviour. If a Chief Executive's bonus leans heavily on top-line premium growth, the incentive points towards aggressive selling and thin underwriting. If it leans on persistency, claim-settlement ratios, grievance resolution and solvency, the incentive points towards the long-term health of the book that backs your claim. Before this amendment, those parameters lived inside board remuneration-committee papers that no ordinary policyholder could see. After 25 May 2026, the parameters and the insurer's three-year track record against them must sit in the open on the company website.

The second reason is the anti-gating rule. Indian financial websites routinely hide useful disclosures behind a form that demands a mobile number, which then becomes a sales lead. By expressly barring insurers from requiring personal details such as a phone number for "authentic viewing", the circular removes a friction that quietly suppresses how often disclosures are actually read. A policyholder comparing two life insurers can now, in principle, open both pay-performance pages side by side without surrendering contact data to either.

For the ordinary buyer, the practical payoff is a new lens for shortlisting an insurer before you ever reach a quote. You can pair the governance disclosure with the numbers you already check when you run a term insurance premium calculation or a health insurance premium estimate: a competitive premium from an insurer whose executive pay is tied to claim-settlement and persistency is a stronger buy than an identical premium from one whose pay is tied purely to growth. To use the lens well, it helps to understand what the regulator means by underwriting and how the IRDAI supervises the firms that do it.

Worked Numbers

The circular does not set a formula, a cap, or a specific number. It mandates disclosure of parameters and of performance against them. So the "worked numbers" here are not regulatory figures to memorise; they are an illustration of how a policyholder can read the disclosure clause 8.3 now forces into the open. Every figure below is a worked illustration, not a published figure from any named insurer.

Suppose an insurer's remuneration committee has adopted five parameters under para 9.2(d) and assigned each a weight. Clause 8.3 requires the insurer to show, for the preceding three years, how it performed against each. A reader can lay that out like this:

The arithmetic a policyholder should do is simple pattern-reading, not algebra. In this illustration, four of the five parameters improve year on year while new-business growth slows from 14% to 9%. That pattern is reassuring: pay is rewarding quality of the book (claims, persistency, solvency, grievances) even as growth cools, rather than chasing growth at the cost of the book. An insurer where the only rising line was premium growth, with claim settlement and persistency falling, would be the warning sign the disclosure is designed to surface.

The link to your own wallet runs through the solvency ratio, the one line in the table with a hard regulatory floor. IRDAI requires every insurer to hold a solvency ratio of at least 1.50, meaning assets of at least 150% of liabilities. In the illustration above the insurer moves from 1.92 to 2.05 over three years, a comfortable cushion above the 1.50 floor; the sum assured you are counting on is only as safe as the balance sheet standing behind it, so a rising solvency line next to a pay scorecard is exactly the alignment clause 8.3 is meant to reveal. Reading these pages takes minutes and costs nothing, which is the point of the no-phone-number rule.

Pitfalls

The amendment is a disclosure rule, and disclosure rules have predictable soft spots. Here are the traps for a policyholder relying on clause 8.3 disclosures as of 2026.

First, disclosure of parameters is not disclosure of rupee amounts. Clause 8.3 requires performance against the parameters that form the basis of remuneration; it does not, by its own wording, require the insurer to publish the absolute salary or bonus paid to the MD or CEO on the governance page. Listed insurers already report director remuneration in their annual reports under company law, but a reader of the clause 8.3 page alone should not assume a rupee figure will be there.

Second, group and related-party payments are covered, but they are harder to read. The replaced clauses 8.1(g) and 8.1(h) deliberately extend to payments made to group entities and related parties, because pay can be routed through a parent or management-services affiliate. A policyholder scanning only the headline KMP parameters may miss the related-party lines, which is where misalignment is easiest to hide.

Third, "easy to understand" is a standard, not a template. The circular, issued 25 May 2026 with immediate effect, requires plain-language, easy-to-reach disclosure, but it does not prescribe a single format. Expect variation between insurers in the first reporting cycle, and treat a page that is technically present but buried three menus deep as falling short of the "easy to reach" test the regulator set.

Fourth, do not confuse this governance disclosure with the product-level protections that decide your individual claim. The pay-performance page tells you about alignment at the top of the firm; it tells you nothing about the sub-limit, co-pay, or room-rent cap inside your own policy. Those clauses still live in your policy wording, and a strong governance scorecard does not override a weak room-rent clause when you are hospitalised.

The table below maps each pitfall to the check a policyholder should run.

FAQ

What exactly does the 25 May 2026 IRDAI circular change?

It amends the Master Circular on Corporate Governance for Insurers 2024 (dated 22 May 2024). It replaces clauses 8.1(g) and 8.1(h) to cover the parameters behind pay for the MD, CEO, all directors and all Key Management Persons, including payments to group entities and related parties, and it inserts a new clause 8.3 requiring insurers to publish three years of performance against those parameters on their website. It is effective immediately from 25 May 2026.

Does this mean I can see my insurer's CEO salary online?

Not necessarily. Clause 8.3 requires disclosure of the insurer's performance against the remuneration parameters for the preceding three years, not the absolute rupee salary or bonus. For specific pay figures of listed insurers, the annual report filed under company law remains the primary document; the clause 8.3 governance page is about parameters and performance, not headline numbers.

Can an insurer ask for my phone number before showing the disclosure?

No. The circular expressly states the disclosure must be made in an easy-to-reach and easy-to-understand manner without requiring personal details such as visitor phone numbers for authentic viewing. A page that forces you to submit contact details before revealing the information does not meet the standard set on 25 May 2026.

Under what legal powers was the circular issued?

Three. Section 34 of the Insurance Act 1938, Section 14 of the IRDA Act 1999, and Regulation 12 of the IRDAI (Corporate Governance for Insurers) Regulations 2024, which were notified on 21 March 2024. Section 34 is the regulator's general power to direct insurers in policyholders' interest.

How should I use the disclosure when choosing a policy?

Use it as a shortlisting filter, not a substitute for reading your policy. Prefer insurers whose three-year scorecard shows rising claim settlement, persistency and solvency rather than growth alone. Then compare actual cost using a term insurance premium or ULIP versus mutual fund comparison, and read your own policy's exclusions before you buy.

Does a good governance scorecard guarantee my claim will be paid?

No. The scorecard reflects alignment at the firm level. Your individual claim is decided by your policy wording, including waiting periods, pre-existing-disease clauses, sub-limits, co-pay and room-rent caps. A strong governance page is a positive signal, but the terms in your own contract still govern what you receive.

When does the amendment take effect and who must comply?

It takes effect immediately from 25 May 2026 and applies to insurers governed by the IRDAI (Corporate Governance for Insurers) Regulations 2024. Because it amends the 22 May 2024 Master Circular directly, the obligation to maintain the clause 8.3 web disclosure is a continuing one, refreshed to cover the preceding three financial years.