A quiet but defining shift is underway in India’s insurance industry. 

The IRDAI’s Insurance Fraud Monitoring Framework 2025 is not just a revisited guideline—it is a strategic signal. A signal that insurers must move from identifying fraud to governing it. From reacting to incidents to anticipating them. From reviewing data quarterly to monitoring risk continuously. 

Here’s a simple, insurance-focused breakdown of IRDAI’s latest risk guidelines and what they mean for insurers. 

This article breaks down what changed from the 2024 draft, what the new expectations mean for insurance companies on the ground, and what it will take—operationally and technologically—to be truly ready for the future. 

2024 rules on the Insurance Fraud Monitoring Framework set the Foundation. 2025 sets the Expectation. 

The 2024 draft guidelines on the Fraud Monitoring Framework from IRDAI focused on helping insurers understand: 

• What fraud looks like 

• Where it originates 

• How red flags appear in the lifecycle 

• Why structured oversight matters 

But the 2025 framework asks a different question—

“Now that you know what fraud is, how will you prevent it, detect it, report it, and govern it?” 

It is a shift from definition to direction, understanding to accountability and shifting a policy to a capability 

The result is a framework that is clearer, sharper, and operationally heavier than its predecessor. 

The New Reality of Risk: IRDAI raises the bar 

The 2025 framework recognizes a simple truth: Insurance fraud is evolving faster than legacy processes can detect it. 

And so IRDAI’s expectations evolved too. 

Below is a clear, insurer-focused decode of what the new rules actually mean. 

Decoded: What the 2025 Fraud Monitoring Framework Means for Insurers 

The IRDAI Fraud Monitoring Framework 2025 may read like a regulatory document, but its implications go far deeper than updated definitions or expanded reporting tables. It signals a philosophical shift in how insurers are expected to understand, govern, and operationalise fraud and risk.  

The regulator is effectively moving the industry away from retrospective compliance and toward proactive, intelligence-led oversight.  

For insurers, this means the conversation is no longer about “meeting guidelines,” but about building institutional capability—governance that can stand up to scrutiny, processes that are consistent across functions, and technology that can surface risks before they crystallize into incidents.  

In essence, the framework is a mirror: it reveals how mature an insurer truly is.  

The following points decode what this new landscape demands from insurers in practice. 

Enterprise-Level Risk Integrationisnow Non-Negotiable 

Under the 2025 framework: 

• Risk registers must be unified 

• Fraud insights must connect across claims, distribution, underwriting, TPAs, and vendors 

• Real-time oversight must be available at the Board level 

The shift: Risk cannot be an end-of-the-month report. It must be a live capability. 

Board & Senior Management Accountability Deepens

In the new regime: 

• The Board cannot merely “approve” an anti-fraud policy—they must demonstrate oversight. 

• The Risk Management Committee becomes the apex owner of fraud governance. 

• Evidence of monitoring and resourcing must be documented. 

The shift: Risk governance moves from a technical function to an organizational discipline. 

Cyber Risk Has Its Own Rulebook Now

IRDAI explicitly acknowledges: 

• Cyber fraud 

• Digital manipulation 

• Identity compromises 

• Forged digital documents 

• API-level vulnerabilities 

Cyber risk is no longer embedded inside operational risk. It stands on its own. 

Outsourcing Risk Becomes a Board Priority

The framework calls for: 

• Transparent monitoring of every outsourced process 

• SLA tracking 

• Vendor risk scoring 

• Data integrity checks across partners 

The shift: Vendor ecosystems cannot operate as black boxes anymore. 

Operational Risk Finally Gets Spotlight

Fraud, leakages, deviations, misinterpretation of rules, incomplete documentation—all must be: 

• Logged 

• Monitored 

• Analyzed 

• Mitigated 

• Auditable 

The shift: Operational risk becomes measurable, reviewable, and governed. 

Why Technology is no longer optional in meeting IRDAI expectations 

IRDAI’s 2025 framework never uses the word “technology,” but every requirement points unmistakably toward it. The scale, speed, and sophistication of fraud—coupled with expectations of real-time oversight, auditability, complex reporting, and cyber vigilance—cannot be met with manual processes or legacy systems. Compliance now demands intelligence, automation, integration, and traceability. In short: without modern technology, insurers may understand the rules, but they will not be able to operationalise them. 

A single source of Risk Truth

To comply, insurers need: 

• A unified repository where all fraud, claims, cyber, underwriting, and operational risks converge 

• Automated ingestion from core systems 

• Cross-functional visibility 

Excel sheets and fragmented tools cannot support this requirement. 

Real-time monitoring, not post-Facto review 

Modern fraud patterns emerge in minutes, not quarters. 

Technology must provide: 

• Risk dashboards 

• AI alerts 

• Severity heat maps 

• Threshold-based notifications 

Risk leaders need proactive indicators—not historical reviews. 

Cyber Fraud Requires AI, Not Checklists

Digital journeys create digital attack surfaces. To address this, insurers need: 

• AI-driven anomaly detection 

• Behavioral monitoring 

• Real-time access governance 

• Continuous validation of system and data flows 

• Digital document forensics 

A static checklist cannot detect a dynamic threat. 

Claims & all other operations need Automation 

Examples: 

• AI-enhanced claims adjudication reduces medical bill manipulation. 

• Pattern-recognition models flag suspicious agent or distributor behaviour. 

• Rules engines prevent underwriting inconsistencies. 

• Digital audit logs give Boards the oversight trail IRDAI expects. 

Without automation, fraud becomes invisible until it becomes expensive. 

Outsourcing risk needs transparent, trackable interface

With insurers relying on TPAs, surveyors, LOSPs, hospitals, and tech providers, visibility across interactions becomes essential. 

API-led ecosystems enable: 

• Real-time partner compliance checks 

• Claims-aging oversight to detect delayed adjudication patterns that may signal fraud 

• Third-party data validation 

• Performance scoring 

Technology makes outsourcing governance possible. 

From interpretation to readiness 

Understanding IRDAI’s 2025 framework is only the starting point. What matters next is whether insurers can demonstrate operational readiness—through governance structures, monitoring mechanisms, and auditable controls. 

To support this, we’ve created a practical compliance checklist that helps insurers: 

• Map IRDAI’s 2025 expectations to operational and technology capabilities 

• Identify gaps across fraud, claims, cyber, and outsourcing risk
• Assess preparedness for FY26–FY27 supervisory reviews 

Submit the form below to receive the checklist by email. 

The checklist is designed as a working reference for Risk, Compliance, IT, and senior leadership teams.