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MUMBAI: The insurance regulator has, for the first time, linked elimination of dark patterns and unfair trade practices to the performance-linked pay of key managerial persons (KMPs), tightening governance rules amid concerns over customer treatment in digital insurance sales.
The move is part of new KMP performance evaluation rules, under which the regulator has made 50% of key performance indicators (KPIs) mandatory and far more prescriptive than earlier, according to industry executives. For the remaining 50% weightage in performance assessment, the nomination and remuneration committee or board may assign additional role-specific parameters aligned with the insurer's business plan, with the metrics and evaluation criteria required to be clearly defined upfront in the remuneration policy.
For the first part, The Insurance Regulatory and Development Authority of India (IRDAI) has laid out six mandatory parameters including product performance, claim responsiveness, grievance redressal, implementation of accounting standards and removal of dark patterns for performance evaluation. Of the 50% mandatory weightage, implementation of Ind-AS and elimination of dark patterns must carry 10% weightage each, while boards can distribute the remaining 30% among the other parameters.
With this regulation, the IRDAI has moved away from earlier principles-based approach toward a more rule-based supervisory regime.
The move is part of new KMP performance evaluation rules, under which the regulator has made 50% of key performance indicators (KPIs) mandatory and far more prescriptive than earlier, according to industry executives. For the remaining 50% weightage in performance assessment, the nomination and remuneration committee or board may assign additional role-specific parameters aligned with the insurer's business plan, with the metrics and evaluation criteria required to be clearly defined upfront in the remuneration policy.
For the first part, The Insurance Regulatory and Development Authority of India (IRDAI) has laid out six mandatory parameters including product performance, claim responsiveness, grievance redressal, implementation of accounting standards and removal of dark patterns for performance evaluation. Of the 50% mandatory weightage, implementation of Ind-AS and elimination of dark patterns must carry 10% weightage each, while boards can distribute the remaining 30% among the other parameters.
With this regulation, the IRDAI has moved away from earlier principles-based approach toward a more rule-based supervisory regime.
( Originally published on May 26, 2026 )
