The Insurance Regulatory and Development Authority of India (IRDAI) has issued a Master Circular, effective for the financial years 2025-26 and 2026-27, outlining mandatory obligations for all life, general, and stand-alone health insurers. This circular, superseding the 2024 version, sets specific targets for insurers to expand coverage in rural areas, social sectors, and motor third-party segments. For rural obligations, insurers must cover a minimum percentage of lives, dwellings, shops, and vehicles within allocated Gram Panchayats, with increasing targets over the two financial years. Social sector obligations require a minimum percentage of lives covered across various schemes. For motor third-party insurance, general insurers must achieve a specified increase in coverage for goods-carrying, passenger-carrying vehicles, and tractors, with targets varying based on their existing market share. The circular details the methodology for councils and insurers to identify, allocate, measure, and report on these obligations, including data collection from Gram Panchayats and verification processes.
Insurance Regulatory and Development Authority of India
Ref: IRDAI/NL/CIR/RSS/85/07/2025 Date: 25.07.2025
Master Circular on Rural, Social Sector and Motor Third Party Obligations
CHAPTER – I
Preliminary
1. Short title and commencement:
a. This master circular is issued under Section 34 of the Insurance Act, 1938, Section 14 of the IRDA Act, 1999 and Regulation 9 of the Insurance Regulatory and Development Authority of India (Rural, Social Sector and Motor Third Party Obligations) Regulations, 2024. This master circular shall be known as Master Circular on Rural, Social Sector and Motor Third Party Obligations, 2025.
b. The master circular is applicable to all life, general and stand-alone health insurers.
c. Master Circular on Rural, Social Sector and Motor Third Party Obligations, 2024 shall be applicable for obligations of Insurers for Financial Year (FY) 2024-25 only. The Master Circular on Rural, Social Sector and Motor Third Party Obligations, 2025 shall be applicable for the FY 2025-26 and FY 2026-27.
2. Definitions for the purpose of this Master Circular
a. “Regulations” means Insurance Regulatory and Development Authority of India (Rural, Social Sector and Motor Third Party Obligations) Regulations, 2024;
b. “General Insurer – 1” means General Insurers other than Stand Alone Health Insurers (SAHI), Agriculture Insurance Company (AIC) & Export Credit Guarantee Corporation of India (ECGC).
c. “General Insurer – 2” means General Insurers including Stand Alone Health Insurers other than AIC & ECGC.
d. “Councils” means “Life Insurance council” and “General Insurance Council”
e. “Base data” means
i. Total number of Lives in the respective Gram Panchayat for Life and General Insurers- 2
ii. Total Number of Dwelling & Shops and motor vehicles in the respective Gram Panchayat for General Insurers -1
CHAPTER – II
Obligations of Insurers
3. Every insurer shall undertake obligations set out by the Authority during the financial years indicated herein–
(A) Obligations with respect to Rural Sector:
a) Life Insurance –
i. Every life insurer shall cover minimum specified percentage of lives under individual and/ or group insurance policies in allocated Gram Panchayats and all insurers collectively shall cover specified minimum number of Gram panchayats.
ii. The Rural Sector obligation for second and third year, in accordance with Regulation 7 (C) of IRDAI (Rural, Social Sector and Motor Third Party Obligations) Regulations, 2024, shall be as under: -.
| Financial year | Minimum number of Gram Panchayats to be allotted to the insurers by the Council |
Minimum percentage of lives to be covered in a Gram panchayat by the insurers |
| 2025-26 | 25000 | 15% |
| 2026-27 | 50000 | (i)25% for the GPs allocated for the previous years and |
| (i) 10% for newly added Gram Panchayats during the year |
b) General Insurance (General Insurers other than stand-alone health insurer(SAHI), Agriculture Insurance Co. Ltd (AIC) and ECGC) –
i. Every General Insurer-1 shall cover minimum specified percentage of a) dwellings and shops under Fire insurance; and b) vehicles under motor insurance in allocated Gram Panchayats and all insurers collectively shall cover specified minimum number of gram panchayats.
ii. The Rural Obligation for second and third year in accordance with Regulation 7 (C) of IRDAI (Rural, Social Sector and Motor Third Party Obligations) Regulations, 2024 shall be as under:
| Financial year | Minimum number of Gram Panchayats to be allotted to the insurers by the Council | Minimum percentage of dwellings and shops to be covered in a Gram panchayat (GP) | Minimum percentage of vehicles to be covered under motor insurance in a Gram panchayat (GP) |
| 2025-26 | 25000 | 15% | 15% |
| 2026-27 | 50000 | (i) 25% for the GPs allocated for the previous years and |
(i) 25% for the GPs allocated for the previous years and |
| (ii) 10% for newly added Gram Panchayats during the year |
(ii) 10% for newly added Gram Panchayats during the year |
c) Health Insurance (General Insurers including SAHI other than AIC and ECGC) –
i. Every General Insurer-2 shall cover minimum specified percentage of lives under a) health insurance and b) personal accident insurance in allocated Gram Panchayats under individual and/ or group insurance policies and all insurers collectively shall cover specified minimum number of gram panchayats.
ii. The Rural Obligation for second and third year in accordance with Regulation 7 (C) of IRDAI (Rural, Social Sector and Motor Third Party Obligations) Regulations, 2024 shall be as under: –
| Financial year | Minimum number of Gram Panchayats to be allotted to the insurers by the Council | Minimum percentage of lives to be covered a Gram panchayat by the insurers under Health insurance |
Minimum percentage of lives to be covered in a Gram panchayat by the insurers under personal accident insurance |
| 2025-26 | 25000 | 15% | 15% |
| 2026-27 | 50000 | (i) 25% for the GPs allocated for the previous years and |
(i) 25% for the GPs allocated for the previous years and |
| (ii) 10% for newly added Gram Panchayats during the year | (ii) 10% for newly added Gram Panchayats during the year |
(B) Obligations with respect to Social Sector:
a) All Insurers – In accordance with Regulation 7 (C) of IRDAI (Rural, Social Sector and Motor Third Party Obligations) Regulations, 2024, the Social Sector obligations for the second and third year in respect of all Insurers (Life, General and Standalone Health, excluding AIC and ECGC) shall be as under:
| Financial year | Minimum percentage of lives to be covered under social sector as a proportion of total lives covered |
| 2025-26 | 10% |
| 2026-27 | 12% |
C) Obligations with respect to Motor Third Party Business:
a) All General Insurers (other than stand-alone health insurers, AIC and ECGC) – In accordance with Regulation 7 (C) of IRDAI (Rural, Social Sector and Motor Third Party Obligations) Regulations, 2024, the obligations with respect to motor third party business for the second and third year in respect of all general insurers (other than stand-alone health insurers, AIC and ECGC) shall be as under:
| Financial year | Motor Third Party Insurance Market Share of general insurer in the last financial year | Minimum percentage increase in number of Goods Carrying, Passenger Carrying Vehicles and Tractors (Miscellaneous segment) over last financial year separately for each category | |
| 2025-26 | 2026-27 | ||
| Second and third Years |
Up to 2% | 12.50% | 13.75% |
| 2%-5% | 10.00% | 11% | |
| 5%-10% | 7.50% | 8.25% | |
| More than 10% | 5.00% | 5.50% | |
CHAPTER – III
Methodology of arriving at the obligations with respect to Rural Sector
4. What to Measure
a) The respective Councils, in consultation with the insurers, as applicable:
i. Shall identify the parameters such as market share or any other parameter to arrive at the minimum number of Gram Panchayats to be allotted to each insurer.
ii. Shall, based on such parameters as applicable to each insurer, determine the minimum number of the Gram Panchayats to be allotted insurer-wise
iii. Shall inform the minimum number of gram panchayats to the life insurers, general insurer -1 and general insurer – 2, as applicable:
a. by at least 45 days before the end of immediate preceding Financial Year (FY).
b) On receipt of the minimum number of Gram Panchayats to be covered, each insurer, in consultation with the respective Council and other applicable insurers, shall:
i. Identify the Gram Panchayats in a State/ UTs of their choice for fulfilment of the obligations.
ii. Ensure adequate coverage of Gram Panchayats in all States and UTs to spread the coverage pan India in such a manner that no State/UT is left unrepresented, including:
a. Life Insurer shall share the names of Gram Panchayats with other life insurers and Life Insurance Council.
b. General Insurer-1 and General Insurer-2 shall share the names of Gram Panchayats with other General and Health insurers and General Insurance Council.
iii. Respective Councils shall ensure that the Gram Panchayat selected by
a. One life insurer is not selected by any other life insurer
b. One General Insurer-1 is not selected by any other General Insurer – 1
c. One General Insurer-2 is not selected by any other General Insurer – 2
iv. Upon finalisation of the list of Gram Panchayats, the respective Councils shall share the insurer-wise list of allocated Gram Panchayats with IRDAI by at least 30 Days before the start of FY.
v. For FY 2025-26, Insurers are encouraged to continue with allocated Gram Panchayats in FY2024-25 to enable continuity. However, in case of any unavoidable circumstances in continuing with in any of the allocated Gram Panchayat, the insurer may change the allocated Gram Panchayat and share the details to the respective Councils along with the reasons for the change before 31st July 2025. The respective Councils shall submit the finalized list of Gram Panchayats to IRDAI by 14th August 2025.
5. Capturing of Village LGD Code
a. Local government Directory of Ministry of Panchayati raj is an online platform to the States/UTs to maintain the up-to-date list of respective administrative units
b. The councils shall obtain “District- Village Panchayat- Village –Pincode” mapping from Local Government Directory of Ministry of Panchayti Raj and share the same to all insurers for identification of Rural Sector business at underwriting level.
c. Insurers shall make necessary arrangements to capture Village LGD Code at underwriting level for measuring the fulfilment of the Rural Obligation This exercise shall be completed by insurers in a time bound manner i.e. within 6-8 weeks.
6. How to Measure
a) Life Insurance – For Life Insurers; Health Insurance – For General Insurer -2
i. The insurers shall obtain the number of lives and other details, as available, pertaining to each gram panchayat. They shall coordinate with Ministry of Panchayati Raj, Government of India, other Central Government, State Government, Local Government bodies and Gram Sachiv of the Gram Panchayat to obtain base data.
Insurers may also use publicly available web portals of Government bodies for obtaining such data .
b. General Insurance – For General Insurer – 1
The insurers shall obtain the number of dwellings & shops and motor vehicles, as available, in a Gram Panchayat. They shall coordinate with Ministry of Panchayati Raj, Government of India, other Central Government, State Government, Local Government bodies and Gram Sachiv of the Gram Panchayat to obtain base data.
Insurers may also use publicly available web portals of Government bodies for obtaining such data.
c. Base Data for Each of the Gram Panchayats Allotted (herein after referred to as “base data”) – to All insurers:
i. Each insurer shall collect the base data and submit the same to respective councils. Based on the submission of insurers, respective Councils shall make necessary arrangements to create and maintain a central pool of base data.
ii. Each insurer shall share quarterly data of meeting the obligations (herein
after referred to as “insured data”) _with respect to each of the Gram Panchayat allotted, as per the formats and timelines determined by the respective Councils.
iii. The respective Councils, in consultation, with the insurers, as applicable,
shall put in place a mechanism:
a. to identify, record, coordinate, monitor and exchange information of the number of lives, dwelling & shops and motor vehicles to be covered in the Gram Panchayat and wherever appropriate, replicate across all Gram Panchayats in the State/ UTs.
b. to keep up-to date, the base data, including an annual review as below:
1. Update of the base data in respect of each Gram Panchayat allocated during the previous years
2. Creating and maintaining base data for the additional Gram Panchayats selected for the Financial Year
3. Annual review of the base data as above shall be completed for every Financial Year by 30th June.
4. For FY 2025-26, this base data shall be finalized by 30th September 2025.
iv. To achieve the goal of full saturation of the Gram Panchayat, the insurers shall work in close coordination with the Gram Sarpanch and Gram Sachiv
7. When to Measure – Common – Life Insurers, General Insurer – 1 and General Insurer – 2
a) The respective Councils after coordinating and exchanging information with the insurers, as applicable, shall:
i. ascertain the number of lives insured by all life insurers and general insurer – 2, and number of dwelling & shops and motor vehicles in case of all General Insurer – 1 ,
ii. Submit insurer-wise data, separately for each Gram Panchayat allocated, in terms of number of lives, dwellings & shops and motor vehicles covered in the quarter within 30 days of end of the quarter to IRDAI as per the returns specified.
b) Any shortfall in the obligations, set above under S.No. 3 (A), as the case may be, to be covered by each insurer shall be considered as non-fulfilment of the obligations by the concerned insurer.
8. How to check Compliance – Common – Life Insurers, Heath Insurers, General Insurer 1 and General Insurer 2
a. The insurers shall use the common format of certificate devised by the councils to obtain the certificate from the Gram Sachiv, on a quarterly basis, certifying the details of the lives or dwellings & shops or motor vehicles insured, as applicable, by the insurers in the allocated Gram Panchayat.
b. In case the positon of Gram Sachiv is vacant in any allocated Gram Panchayat, the insurers may obtain such certificate from a person authorised to act as Gram Sachiv for the said Gram Panchayat. The certification shall form the basis of reporting of the numbers of lives covered on a quarterly basis to IRDAI.
c. The certificate from the Gram Sachiv shall be the proof of lives or dwellings & shops or motor vehicles insured, as applicable, in the Gram Panchayat and the same shall be stored in electronic format and made available for verification by IRDAI.
d. Despite best efforts, if for any unforeseen reasons, the insurer couldn’t obtain Gram Sachiv certificate in any of the allocated Gram panchayats, self-certification using Local Government Directory data shall be allowed in lieu of Gram Sachiv Certificate. Such self-certification:
a. shall not exceed 25% of the total number of allocated Gram panchayats.
b. Shall be submitted by the Chief Executive Officer of the Insurer, duly certified by the statutory auditor of the respective insurer, along with the reasons for not obtaining the Gram Sachiv Certificate.
CHAPTER – IV
Methodology for arriving at the obligations with respect to Social Sector
9. In respect of all Insurers (Life, General and Standalone Health, excluding AIC and ECGC)
a) What to measure – Every insurer shall insure a minimum number of lives as a proportion of total lives in accordance with Regulation 4(B), 5 and 7 of the IRDAI (Rural, Social Sector and Motor Third Party Obligations) Regulations, 2024.
b) How to measure – The respective Councils shall:
i. coordinate with Government agencies to collate data for social sector population and share with life and general insurers, as applicable.
ii. approach the appropriate Authorities to access the list of beneficiaries of various central and/ or state sponsored schemes through the schemes website given in Regulation 5 (b) and (c) of the IRDAI (Rural, Social Sector and Motor Third Party Obligations) Regulations, 2024 and any other relevant database.
iii. In case no government backed identity card is available with the prospect, as a proof of identify for social sector, the insurer may obtain a self-certification from the prospect of his/her profession supported by an appropriate proof such as photographs etc. However, such cases of self-certification shall not exceed 20% of their total social sector obligations.
c) When to measure – At the end of the quarter, every insurer shall ascertain the number of lives covered under the definition of “social sector” as a proportion of the total lives covered and report the same within 30 days of end of the quarter to IRDAI.
d) How to check compliance – The insurer shall make arrangements to record classification of lives as per the definition of “Social Sector”. It shall also record the source / database from where the lives classified as “Social Sector” has been taken.
CHAPTER – V
Methodology for arriving at the obligations with respect to Motor Third Party
10. For General Insurer – 1
a. What to measure – Every general insurer -1 shall insure a minimum percentage increase in number of goods carrying, passenger carrying vehicles and tractors in accordance with Regulation 6 and 7 of the IRDAI (Rural, Social Sector and Motor Third Party Obligations) Regulations, 2024.
b. How to measure – The general insurer – 1 along with General Insurance Council shall:
i. engage with the Insurance Information Bureau (IIB) and State RTAs, as available, to identify uninsured goods carrying, passenger carrying vehicles and tractors in the country.
ii. in consultation with IIB shall prepare a list, as available, of uninsured goods carrying, passenger carrying vehicles and tractors which shall carry the category of vehicle, its registration number, the name of the owner and the State RTA where it is registered.
c) When to measure – Every general insurer – 1 shall submit to IRDAI on quarterly basis within 30 days of end of the quarter
i. the number of goods carrying, passenger carrying vehicles and tractors already on its books and/ or on the books of other insurers and renewed by it and,
ii. the number of uninsured goods carrying, passenger carrying vehicles and tractors insured by it to arrive at the achieved obligations for motor third party insurance, insurer-wise.
d) How to check compliance – For the purposes of checking compliance, the data given in 10(c) (ii) above will be cross-verified against the IIB database of uninsured vehicles.
CHAPTER – VI
Miscellaneous
11. Reporting requirements –The insurer shall submit to the Authority returns as per Master Circular on submission of returns.
12. Insurers shall submit the data on Rural, Social and MTP obligations to IIB as per the respective data formats similar to other LoBs.
sd\-
Suresh Nair
GM (Non-Life)
