Economic Survey: Insurance Penalties Soar 10x to Rs 10 Crore, IRDAI Gets Disgorgement Powers

• The Economic Survey 2025-26 reveals a significant tightening of insurance sector regulations by the Centre.
• Maximum penalties for violations have been increased tenfold, from Rs 1 crore to Rs 10 crore.
• IRDAI has been granted new powers to order disgorgement of wrongful gains from regulatory breaches, mis-selling, or non-compliance.
• The enhanced authority aims to improve market discipline and strengthen policyholder protection.
• Insurance intermediaries, including brokers and agents, are now explicitly covered under these stricter penal provisions.

Why It Matters: Insurance sector faces tougher enforcement with 10x higher penalties and IRDAI's new disgorgement powers.