IRDAI Ends a 5-Year-Old Rule: Why Surveyors Can No Longer Freely Add Lines of Business to Claim Assessments

On 10 October 2025, the Insurance Regulatory and Development Authority of India (IRDAI) issued circular Ref IRDAI/SUR/CIR/MISC/115/10/2025, a short order with a long title: "Cessation of the practice of allowing additional line of business/department to surveyor and loss assessors based on categorization letter issued in 2001-02." In two pages it closed a route that had existed, in one form or another, for roughly 23 years, and it did so with immediate effect. For policyholders who will never read a surveyor's licence, the change still matters: it governs who is legally competent to stand in your damaged factory, your crashed car, or your flooded warehouse and put a rupee figure on the loss.

This deep dive explains what the 2025 circular actually rescinds, why the person assessing a general-insurance claim must hold the correct line of business (LOB) on their licence, and how a surveyor's judgement flows directly into the amount an insurer pays you. We work through two realistic claim calculations and flag the policy-wording traps that decide whether a cheque arrives in full or short.

The Rule / Product

Surveyors and loss assessors (SLAs) are the independent professionals who inspect general-insurance losses and report the cause, extent and quantum of damage to the insurer. Their role is statutory, not optional: the assessment of general-insurance losses by approved surveyors is anchored in the Insurance Act, 1938, and administered today through the IRDAI (Insurance Surveyors and Loss Assessors) Regulations, 2015. The 10 October 2025 circular sits on top of that framework and tidies up a two-decade-old legacy practice.

The legacy begins with the IRDA Surveyors and Loss Assessors (Licensing, Professional Requirements and Code of Conduct) Regulations, 2000. Individual surveyors licensed before those 2000 regulations had originally been categorised across multiple lines of business, each line being a technical department such as fire, motor, marine cargo, marine hull, engineering or miscellaneous. That broad categorisation was captured in a categorisation letter issued in the 2001-02 period, a single document that effectively listed every department an older surveyor could touch.

Over time the regulator narrowed this. The number of lines a single SLA could operate under one licence was capped at three, so that a surveyor had to demonstrate genuine, current competence in each of the three departments rather than claim a dozen on paper. That three-LOB discipline held until a later circular reopened the gate.

The circular that reopened the gate was IRDA/SUR/CIR/MISC/042/02/2020, dated 4 February 2020. It permitted SLAs who met the prescribed educational qualifications to add further lines of business based on the old 2001-02 categorisation letters, and it removed the numeric cap on the number of LOBs a single licence could carry. In practice, a surveyor could point to a 2001-02 letter and have a department from 24 years ago switched back on.

IRDAI's problem with that route, stated in the 2025 circular, is competence drift. The Authority found that many SLAs seeking new lines under the 2020 route had not actually conducted any survey work in that line since 2002. Given 23 years of technological change across motor telematics, fire-detection engineering and industrial plant, the regulator judged that knowledge frozen in 2002 is no longer a safe basis for assessing a 2025 loss. The 10 October 2025 circular therefore rescinds the 4 February 2020 circular with immediate effect and ends the practice of granting additional LOBs on the strength of the legacy 2001-02 letters. Individual surveyors remain subject to the eligibility norms under Regulation 3 of the IRDAI (Insurance Surveyors and Loss Assessors) Regulations, 2015, which is now the single gateway for adding competence.

Why It Matters

A policyholder never chooses the surveyor; the insurer appoints one after a claim is intimated. That is precisely why the regulator, not the market, polices surveyor competence. Under the 10 October 2025 circular, the only way to carry a line of business is to satisfy the Regulation 3 eligibility norms of the 2015 Regulations, so the route that let a surveyor rely on a 24-year-old letter is now shut.

The practical stake is the gap between the repair bill you hand in and the assessed loss the surveyor certifies. In general insurance the surveyor's quantum report is the single largest input into what the insurer pays, and getting technical deductions such as depreciation, salvage and the average clause right requires current knowledge of the relevant department. A surveyor whose fire or engineering competence dates to 2002 is more likely to misjudge modern reinstatement costs, which can move a settlement by tens of thousands of rupees.

This also sharpens the difference between life and general insurance for consumers. If you are comparing a pure protection product using our term insurance premium calculator, there is no surveyor in the chain: a death claim turns on documents, not on-site assessment. The surveyor regime bites on general-insurance losses, so it matters most when you file a motor own-damage, fire, marine or engineering claim rather than a life or health one. For context on how the insurer's own capacity to pay is capped by the policy, see our glossary note on sum insured.

The change should also be read alongside IRDAI's wider push on claim quality. Our recent explainer on the Saral Jeevan Bima standard term policy covered standardisation on the life side, while the surveyor circular of 10 October 2025 does the same cleanup on the assessment side of general insurance. Both reflect a regulator narrowing discretion that had drifted over two decades.

Worked Numbers

Because the surveyor sets the assessed loss, the clearest way to see the stakes is to walk a claim from estimate to cheque. The figures below are illustrative inputs chosen to show the arithmetic; your own policy schedule governs the actual numbers.

Take a private car with an Insured Declared Value (IDV) of Rs 8,00,000 that suffers an own-damage accident. The garage estimate is Rs 1,20,000. The surveyor's quantum report applies standard deductions before the insurer pays.

Here the Rs 1,20,000 estimate becomes a Rs 94,000 settlement, a 21.7% reduction, entirely through technical deductions the surveyor is responsible for applying correctly. If the surveyor mis-grades a part's depreciation band, the same claim could settle several thousand rupees higher or lower, which is exactly the competence risk the 2025 circular targets. You can model how a vehicle's own-damage cover is priced before any claim using our two-wheeler premium calculator for the motor side.

The stakes grow with commercial property, where the average clause for under-insurance can slice a large claim. Suppose a small factory insures its building and plant for a sum insured of Rs 50,00,000, but the surveyor finds the actual value at risk on the date of loss was Rs 80,00,000. A fire causes an assessed loss of Rs 10,00,000.

The under-insurance here costs the factory owner Rs 3,75,000 against the Rs 10,00,000 loss, because the average clause reduces the claim to 62.5% before the Rs 10,000 excess. Correctly establishing the Rs 80,00,000 value at risk is a specialist fire and engineering judgement; a surveyor relying on 2002-era benchmarks could value it wrongly. For how total protection need is sized on the life side instead, our health insurance premium calculator shows the comparable exercise for medical cover.

Pitfalls

The surveyor's competence matters only because general-insurance policies are riddled with wording that shifts money away from the headline sum insured. The 2025 circular improves who applies these clauses; it does not remove the clauses themselves. Watch for the following, each of which routinely reduces a general-insurance settlement by double-digit percentages.

First, depreciation. In the motor example above, depreciation and salvage alone cut Rs 24,000 off a Rs 1,20,000 estimate. Depreciation grading is department-specific knowledge, which is why a surveyor's current LOB competence under the 2015 Regulations is not a paperwork formality.

Second, the average clause for under-insurance. As the fire table shows, insuring Rs 50,00,000 of a Rs 80,00,000 asset cost the owner Rs 3,75,000 on a single Rs 10,00,000 loss. The fix is to insure to full value at risk and to have it re-benchmarked; a 2002-frozen valuation approach is precisely the risk IRDAI flagged on 10 October 2025.

Third, deductibles and excess. The Rs 2,000 motor deductible and the Rs 10,000 fire excess in our tables are small individually, but they stack on top of depreciation and average. On the health side, the parallel traps are sub-limits and co-payment clauses; see our glossary notes on sub-limit and underwriting for how insurers cap and price risk before a claim ever arises.

Fourth, the assumption that any licensed surveyor can handle any loss. After 10 October 2025, a surveyor can hold a line of business only by meeting Regulation 3 eligibility, not by producing a 2001-02 letter. If you ever receive an assessment that looks technically off, you are entitled to question whether the appointed surveyor holds the relevant line, because the regulator has now made that line harder to acquire casually.

FAQ

What exactly did IRDAI change on 10 October 2025?

Circular IRDAI/SUR/CIR/MISC/115/10/2025, dated 10 October 2025, rescinded the earlier circular IRDA/SUR/CIR/MISC/042/02/2020 of 4 February 2020 with immediate effect. The 2020 circular had allowed surveyors to add lines of business based on 2001-02 categorisation letters and had removed the numeric cap on lines per licence; both of those concessions are now withdrawn.

What is a line of business for a surveyor?

A line of business (LOB), also called a department, is a technical category of general insurance such as fire, motor, marine cargo, marine hull, engineering or miscellaneous. Before the post-2000 reforms, individual surveyors could be categorised across many lines, and the number was later capped at three per licence to ensure genuine competence in each.

Will my existing or pending claim be affected?

No. The 10 October 2025 circular governs how surveyors acquire additional lines of business going forward; it does not reopen or change settled claims. Any claim you have in progress continues to be assessed by the appointed surveyor under the IRDAI (Insurance Surveyors and Loss Assessors) Regulations, 2015.

Does this change who can survey my motor or fire claim?

Potentially, over time. From 10 October 2025 a surveyor can carry a motor, fire or engineering line only by satisfying the Regulation 3 eligibility norms of the 2015 Regulations, rather than by relying on a 24-year-old categorisation letter. The intended effect is that the person assessing a 2026 loss holds current competence in that department.

Why did IRDAI consider the 2001-02 letters unreliable?

The Authority found that many surveyors adding lines under the 2020 route had not conducted any survey work in that line since 2002. Across 23 years of technological change in vehicles, plant and fire engineering, the regulator judged that competence evidenced only by a 2001-02 letter no longer reflects current knowledge.

How can I check whether my surveyor is licensed?

Surveyor and loss assessor licensing is maintained by IRDAI under the 2015 Regulations, and licence details are verifiable through the regulator at irdai.gov.in. You can ask the insurer for the appointed surveyor's licence number and confirm the lines of business it covers.

Does this affect my insurance premium?

Not directly. The 10 October 2025 circular concerns surveyor competence at the claim-assessment stage, not pricing, which is driven by underwriting and your risk profile. If you want to see how general-insurance cover is priced before any claim, our term insurance premium calculator and two-wheeler premium calculator walk through the inputs.