India's IRDAI Forms Seven-Member Working Group to Govern AI Adoption in Insurance

The Insurance Regulatory and Development Authority of India (IRDAI) has moved to bring structure and oversight to the rapidly expanding use of artificial intelligence across India's insurance sector. On June 19, 2026, the regulator announced the formation of a seven-member working group on AI, giving it a three-month deadline to deliver recommendations that are expected to form the basis of the sector's first formal AI governance framework.

The working group is chaired by Sandeep K. Shukla, director of IIIT Hyderabad, and includes Nandakumar Saravade, former CEO of ReBIT; Ashutosh Bahuguna, a scientist at CERT-In; and Manoj Nayak, Chief Information Security Officer at SBI Life, among others. The panel's mandate is broad: it will first map the current state of AI adoption among regulated entities — assessing how far insurers have deployed the technology, what systems are in use, and what governance structures already exist. From that baseline, it is tasked with proposing a framework for ethical, transparent, and explainable AI use, with explicit attention to claims processing and fraud detection, the two functions where automated decisions carry the highest stakes for policyholders.

IRDAI emphasized that the rapid advancement of AI is creating new ethical, operational, and cybersecurity challenges, making robust governance frameworks essential for the industry to harness the technology responsibly while safeguarding policyholder interests and data protection. The working group's formation builds on IRDAI's issuance of revised information and cyber security guidelines in April 2026, which directed regulated entities to begin compliance in the current financial year, citing an evolving threat landscape.

The regulatory move comes amid broader industry uncertainty about AI readiness. A GlobalData poll conducted across the first two quarters of 2026, surveying 113 insurance industry respondents, found that close to a quarter believed AI was not yet ready for widespread use in insurance — partly because current use cases are largely limited to customer service and chatbots rather than full-scale implementation, and partly due to unresolved questions about who bears liability for AI mistakes. The three-month deadline places the group's recommendations within the current financial year, and given IRDAI's pattern of moving from guidance to obligation within a single year, insurers are being advised to audit their existing AI deployments and address governance gaps before final rules arrive.