Artificial Intelligence (AI) is gradually becoming part of everyday insurance operations, from claim processing and fraud detection to customer support and risk assessment. As insurers adopt AI tools more widely, questions around transparency, data privacy, cybersecurity, and accountability are also becoming more important.
To address these concerns, the Insurance Regulatory and Development Authority of India (IRDAI) has formed a seven-member working group to study the impact of AI on the insurance sector and recommend a framework for its responsible use. This article explains why the working group has been formed, what it will examine, and what it could mean for insurers and policyholders in the future.
What Is IRDAI's AI Working Group?
The Insurance Regulatory and Development Authority of India (IRDAI) has constituted a seven-member working group on Artificial Intelligence (AI) through an office order dated 17 June 2026 (Ref. No. IRDAI/GA&HR/ORD/MISC/90/06/2026). The group will study how AI is being used across the insurance sector and recommend guidelines for its safe, ethical, and transparent adoption.
Who Is Part of the Working Group?
The working group is chaired by Professor Sandeep K. Shukla, Director of IIIT Hyderabad and includes representatives from regulatory, cybersecurity, and insurance backgrounds.
Members include:
Professor Sandeep K. Shukla, Director, IIIT Hyderabad (Chairperson)
Serving and former officials from CERT-In
Representatives from ReBIT (Reserve Bank Information Technology)
Representatives from life insurance companies
Representatives from general insurance companies
Representatives from standalone health insurance companies
Deepak Gaikwad, General Manager and Chief Information Security Officer (CISO), IRDAI (Member Convener)
Objectives of the Working Group
The primary objectives of the working group include:
Assessing the current adoption and usage of AI across the insurance sector
Understanding the impact of AI on insurers, policyholders, and the insurance ecosystem
Identifying potential risks associated with AI, including ethical, operational, and cybersecurity concerns
Studying the use of advanced AI tools and their implications for the industry
Recommending measures to ensure responsible and transparent AI adoption
Reviewing global AI governance and regulatory practices relevant to insurance
Key Functions of the Working Group
To achieve its objectives, the working group will:
Evaluate the maturity of AI deployment and governance among insurance companies
Conduct a structural assessment of AI systems used by regulated entities
Develop recommendations for an AI governance framework for the insurance sector
Suggest guidelines for ethical, transparent, and explainable AI usage
Examine AI applications in areas such as claims processing and fraud detection
Recommend security controls to mitigate AI-driven cyber threats
Assess the need for sector-wide AI stress testing and risk assessments
Propose an AI audit framework covering both pre-deployment and post-deployment reviews
Identify skill gaps and capacity-building requirements for insurers and regulators
Submit recommendations to IRDAI within three months
Why Has IRDAI Formed This Working Group?
As Artificial Intelligence becomes more widely used across the insurance sector, IRDAI aims to better understand its opportunities, risks, and long-term impact before establishing a regulatory framework.
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Assess AI adoption in insurance
Understand how insurers are currently using AI and evaluate the maturity of AI deployment across the sector.
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Protect policyholder interests
Study how AI may affect policyholders and identify safeguards to ensure fair, transparent, and accountable outcomes.
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Address cybersecurity concerns
Examine risks arising from AI-driven cyberattacks and recommend security controls to strengthen resilience.
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Promote responsible AI usage
Develop recommendations for ethical, transparent, and explainable use of AI tools and models within insurance operations.
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Strengthen AI governance
Evaluate existing governance practices and suggest a framework that insurers can follow when deploying AI systems.
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Review AI use in claims and fraud detection
Assess how AI is being used in key insurance functions and identify best practices for implementation.
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Learn from global regulatory approaches
Study how regulators in other countries are addressing AI-related challenges in the insurance industry.
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Prepare the sector for future risks
Examine whether industry-wide stress testing, audits, and additional oversight mechanisms may be required as AI adoption grows.
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Build industry capabilities
Identify skill gaps and capacity-building requirements for insurers, regulators, and other stakeholders involved in AI adoption.
What Does This Mean for Insurers?
As insurers continue to adopt AI-powered tools across various functions, the working group's recommendations could influence how these technologies are governed and monitored in the future.
More structured AI governance and oversight requirements
Potential AI audit and compliance obligations
Greater focus on cybersecurity and AI-related risk management
Standardised frameworks for ethical and transparent AI adoption
Increased accountability around AI-driven decisions and processes
What Does This Mean for Policyholders?
While the working group's recommendations are still being developed, the broader goal is to ensure that AI adoption benefits customers without compromising security, fairness, or transparency.
Stronger safeguards for policyholder data and privacy
Greater transparency in AI-assisted decision-making
Better protection against risks arising from AI misuse
Increased accountability from insurers using AI systems
More confidence in AI-enabled insurance services and processes
What's Next?
The working group, chaired by Professor Sandeep K. Shukla, Director of IIIT Hyderabad, has been given three months to submit its recommendations to IRDAI. The findings are expected to help shape future AI governance practices within India's insurance sector and could form the foundation for regulatory guidelines on the responsible use of AI by insurers.
While AI is already being used across various insurance processes, its adoption is expected to accelerate in the coming years. Through this working group, IRDAI is seeking to ensure that innovation is accompanied by adequate safeguards, transparency, and accountability. The group's recommendations could play an important role in shaping how AI is governed within India's insurance sector in the years ahead.
Frequently Asked Questions
What is IRDAI's AI Working Group?
IRDAI's AI Working Group is a seven-member committee constituted to study the adoption and impact of Artificial Intelligence in the insurance sector and recommend frameworks for its safe, ethical, and transparent use.
Who is heading IRDAI's AI Working Group?
The working group is chaired by Professor Sandeep K. Shukla, Director of IIIT Hyderabad. It also includes experts from CERT-In, ReBIT, insurance companies, and IRDAI.
Why has IRDAI formed an AI Working Group?
IRDAI has formed the working group to assess how AI is being used in insurance, identify potential risks, evaluate existing governance practices, and recommend safeguards that protect policyholders while encouraging innovation.
What are the key objectives of the AI Working Group?
The group's objectives include assessing AI adoption in insurance, studying risks associated with AI, reviewing global regulatory practices, recommending governance frameworks, and identifying cybersecurity and operational challenges.
How is AI currently used in the insurance sector?
Insurance companies use AI for various functions such as claims processing, fraud detection, customer support, underwriting, risk assessment, and document verification.
What could the AI Working Group mean for insurers?
The recommendations could lead to stronger AI governance requirements, audit frameworks, cybersecurity measures, compliance obligations, and greater accountability around AI-driven processes.
How could policyholders benefit from IRDAI's AI initiative?
Policyholders may benefit from stronger data protection measures, improved transparency in AI-assisted decisions, enhanced safeguards against misuse, and greater accountability from insurers using AI systems.
Will the AI Working Group create new regulations for insurers?
The working group itself will not create regulations. Its role is to study AI-related issues and submit recommendations to IRDAI, which may use those recommendations to develop future guidelines or regulatory frameworks.
How long does the AI Working Group have to submit its recommendations?
IRDAI has given the working group a timeline of three months to submit its recommendations.
What role does cybersecurity play in the AI Working Group's mandate?
Cybersecurity is a major focus area. The group will assess AI-related cyber risks, recommend security controls, and examine whether additional measures such as sector-wide stress testing may be required for insurers.
