Draft Indian Insurance Companies (Inquiry, Adjudication and Appeal) Rules, 2026
The Ministry of Finance (Department of Financial Services), through Notification G.S.R. 679(E) dated 30 July 2026, has published the draft Indian Insurance Companies (Inquiry, Adjudication and Appeal) Rules, 2026 for public information and invited objections or suggestions within 30 days from the date the draft rules are made available to the public. The draft rules prescribe the framework for complaints, inquiries, adjudication, penalties and appeals under Section 30A read with Section 39 of the General Insurance Business (Nationalisation) Act, 1972. They provide for filing complaints in Form I, issuance of show cause notices, inquiry procedures, powers of the adjudicating officer, factors for determining penalties, service of notices and orders, and communication of orders. The draft also prescribes an appeal mechanism, including filing appeals in Form IV, a 30-day appeal period with provision for delayed admission on sufficient cause, disposal of appeals within 60 days of admission, extension of specified timelines for reasonable cause, and credit of penalties realised to the Consolidated Fund of India.
MINISTRY OF FINANCE
(Department of Financial Services)
NOTIFICATION
New Delhi, the 30th July, 2026
G.S.R. 679(E).—Draft rules which the Central Government proposes to make in exercise of the powers conferred by sub-section (1) and (2) of section 30A read with clause (ea) and (eb) of sub-section (2) of section 39 of the General Insurance Business (Nationalisation) Act, 1972 (57 of 1972), are hereby published for information of all persons likely to be affected thereby, and notice is hereby given that the said draft rules will be taken for publication in the Gazette of India after the expiry of a period of thirty days from the date on which the copies of the draft rules are made available to the public.
Objections or suggestions, if any, from persons likely to be affected may be addressed to the Secretary, Ministry of Finance, Department of Financial Services, Jeevan Deep Building, 3rd floor, Sansad Marg, New Delhi 110001.
Objections or suggestions that may be received from persons likely to be affected with respect to the draft rules within the aforesaid period shall be considered by the Central Government.
DRAFT RULES
1. Short title and commencement.—(1) These rules are the Indian Insurance Companies (Inquiry, Adjudication and Appeal) Rules, 2026.
(2) They shall come into force on the date of their publication in the Official Gazette.
2. Definitions.—In these rules, unless the context otherwise requires,—
a. “Act” means the General Insurance Business (Nationalisation) Act, 1972 (57 of 1972);
b. “Adjudicating officer” means the officer appointed by the Central Government as adjudicating officer under sub-section (1) of section 30A of the Act;
c. “Appellate authority” means an officer authorised under sub-section (2) of section 30A of the Act to whom an appeal may be preferred against an order of the adjudicating officer made under sub-section (1) of section 30A of the Act;
d. “Form” means a form appended to these rules;
e. ‘“Indian Insurance Company” means an Indian insurance company as defined under section 3(i) of the General Insurance Business (Nationalisation) Act, 1972;
f. “Inquiry” means the inquiry referred in sub-section (1) of section 30A of the Act;
g. “Party” includes both appellant and respondent in the appeal before the Appellate Authority;
3. Complaint. — An Indian Insurance Company may file a complaint in Form-I through electronic means as notified from time to time or physically, through speed post or by hand to the adjudicating officer regarding any contravention committed under section 29 of the Act.
4. Inquiry by adjudicating officer.—For the purposes of sub-section (1) of section 30A, the adjudicating officer shall hold inquiry in the manner provided in rule 5.
5. Manner of holding inquiry.—(1) For the purposes of holding inquiry, the adjudicating officer shall, in the first instance, issue a notice in Form II to such person requiring him to show cause within such period as may be provided in the notice, being not less than fourteen days from the date of service, as to why such an inquiry should not be held against him.
1. Every notice issued to a person under sub-rule (1) shall indicate the nature of contravention.
2. After considering the cause, if any, shown by such person, if the adjudicating officer is of the opinion that an inquiry should be held, he shall issue a notice fixing a date for the appearance of that person either personally or through his authorised representative:
3. On the date fixed, the adjudicating officer shall explain to the person proceeded against or his authorised representative, the contravention alleged to have been committed by such person indicating the provisions of the Act in respect of which contravention is alleged to have taken place.
4. The adjudicating officer shall, then, give an opportunity to such person to produce documents or evidence as per Form-III as he may consider relevant to the inquiry and if necessary, the hearing may be adjourned to a future date and in taking such evidence, the adjudicating officer shall not be bound to observe the provisions of the Bharatiya Sakshya Adhiniyam, 2023 (47 of 2023).
5. If any person fails or refuses to appear before the adjudicating officer as required by sub rule (3), the adjudicating officer may proceed with the inquiry in the absence of such person after recording the reasons for doing so.
6. Powers of Adjudicating Officer.— The Adjudicating Officer shall, for the purpose of holding an inquiry, have the same powers as are vested in a civil court under the Code of Civil Procedure, 1908 while trying a suit, in respect of –
a. summoning and enforcing the attendance or appearance of any person and examining him;
b. requiring the discovery and production of documents or other material objects;
c. receiving evidence on affidavits;
d. requisitioning any public records or a copy thereof from a public office;
e. issuing orders for the examination of witnesses or documents; and
f. any other matter which may be prescribed.
7. Order of the adjudicating officer.—(1) If, upon consideration of the evidence produced before the adjudicating officer, the adjudicating officer is satisfied that the person has committed a contravention under section 30 of the Act, he may, by order in writing, impose such penalty as he thinks fit in accordance with section 30.
a. Every order made under sub-rule (1) shall specify the provisions of the Act in respect of which contravention has taken place and shall contain brief reasons for such decisions.
b. Every such order shall be dated and signed by the adjudicating officer.
c. The adjudicating officer shall complete the proceeding within six months from the issuance of the notice.
8. Factors to be considered while imposing penalty.—While determining the quantum of penalty under section 30, the adjudicating officer shall have due regard to the following factors, namely :—
a. the amount of disproportionate gain or unfair advantage, wherever quantifiable, made as a result of the contravention;
b. the amount of loss caused to the Indian Insurance Company as a result of the contravention;
c. the repetitive nature of contravention;
d. nature, gravity and duration of the contravention;
e. action taken by the person to mitigate the effects and consequences of the contravention, and the timelines and effectiveness of such action;
f. such other factors as may be deemed appropriate by the adjudicating officer.
9. Copy of the Order.— The adjudicating officer shall send a copy of every order made under rules by him to the person on whom the penalty is imposed and to the Indian Insurance Company.
10. Service of notices and orders.—(1) A notice or an order issued under these rules shall be served on the person in the following manner, that is to say,—
(a) by delivering it to that person or his duly authorised representative; or
(b) by sending it to the person through electronic means provided that there is sufficient evidence of actual delivery of the electronic record to the concerned person;
(c) by sending it to the person by registered post or speed post with acknowledgement due
i. to the address of his place of residence or his last known place of residence or the place where he carried on, or last carried on, business or personally works, or last worked, for gain
ii. to the address of the registered office of the insurer;
(d) where it cannot be served under clause (a) or clause (b) or clause (c), by affixing it on the outer door or some other conspicuous part of the premises in which that person resides or is known to have last resided, or carried on business or personally works or last worked for gain and the written report thereof should be witnessed by two persons.
11. Appeal. — (l) Any person aggrieved by an order of the adjudicating officer under these rules, may prefer an appeal to the appellate authority in Form-IV.
(2) The Central Government may by notification under sub-section (2) of section 30A of the Act appoint an Appellate Authority.
(3) The appeal shall be filed with the appellate authority within a period of thirty days from the date of the order:
Provided that, the appeal may be admitted after the expiry of the period of thirty days, if the appellant satisfies the appellate authority that he had sufficient cause for not preferring the appeal within such period.
(4) The appeal shall be accompanied by a copy of order of adjudicating officer issued under sub-rule (1) of rule 6, a clear statement of facts appealed against and the grounds for appeal and the relevant section of the Act.
(5) The appeal shall be filed in triplicate by the appellant in person or by his duly authorised representative in writing or by registered post or speed post or through electronic means.
(6) The appeal sent by post shall be deemed to have been filed to the appellate authority on the day it is received.
(7) If on scrutiny, the appeal is found to be in order, it shall be admitted and if the appeal is found to be defective, the same shall, after notice to the party, be returned for compliance and if within fifteen days of receipt of such notice or within such extended time as may be granted, the defect is not rectified, the appellate authority, may, for reasons to be recorded in writing, decline to admit the appeal.
(8) A copy of the appeal shall be served by the appellate authority on the respondent, by hand or by registered post or speed post or through electronic means.
(9) Respondent may, within thirty days of service of notice of appeal, file a response to the appellate authority.
(10) The appellate authority may call for the records relating to the proceedings from the respective adjudicating officer.
(11) The appellate authority may, after giving the parties to the appeal an opportunity of being heard, pass such orders as he may consider reasonable.
(12) The appellate authority shall dispose of the appeal within sixty days from the date of admission of appeal.
12. Extension of time. — The adjudicating officer or the appellate authority may, for reasons to be recorded in writing,
where there is a reasonable cause for the delay or failure to act, extend any period specified in these rules till such period as he considers reasonable.
13. Order and penalties. — (l) Every order under these rules, shall be dated, signed and communicated to all the parties.
(2) All sums realised by way of penalties under these rules shall be credited to the Consolidated Fund of India.
[F. No. 12018/1/2020-Ins.II]
Dr. DEBASISH PRUSTY, Addl. Secy.
