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Banking and Insurance - Laws and Practice · Regulatory Framework in Insurance

Regulations, Offences and Penalties under the Insurance Acts

Updated 11 October 2026 · Fact-checked

Insurance law gives IRDAI power to make regulations, act against contraventions and levy penalties. A person aggrieved by an order of the Authority can appeal to the Securities Appellate Tribunal within 45 days of receiving the order. Solve questions by identifying the order, the forum, the time limit and the effect.

Understand Regulations, Offences and Penalties under the Acts

Insurance in India is governed mainly by the Insurance Act, 1938 and the IRDA Act, 1999. The Authority (IRDAI) regulates insurers and intermediaries. It can make regulations, call for information, issue orders and, where the law allows, impose penalties.

A regulator needs a check on its own power. So the Insurance Act gives a right of appeal. Under section 110, any person aggrieved by an order of the Authority, or by an order made by way of adjudication, may appeal to the Securities Appellate Tribunal (SAT) having jurisdiction in the matter.

The appeal must be filed within forty-five days from the date the person receives a copy of the order. It must be in the prescribed form with the prescribed fee. SAT may admit a late appeal if it is satisfied there was sufficient cause for the delay. SAT must hear the parties and may confirm, modify or set aside the order. It sends a copy of its order to the Authority and the parties, and should try to dispose of the appeal within six months of receiving it. Sections 15U, 15V, 15W, 15Y and 15Z of the SEBI Act apply to these appeals.

The Act has other appeal routes too. Under section 61A, an order of the Tribunal (NCLT) in matters such as reducing insurance contracts can be appealed to NCLAT within 45 days. No appeal lies against an order made with the consent of the parties. Under section 6B, a scheme sanctioned by the officer for fixing capital structure can be appealed to SAT within ninety days. Under section 52BB, an order of the Administrator prohibiting transfer of property can be appealed to SAT within fourteen days of service.

The supplied text does not set out the penalty amounts or the IRDA Act sections on regulation-making power, so learn those from the ICSI study material. Your answer should always follow the sequence: provision, facts, conclusion.

Key rules to remember

Appeal against Authority's order (section 110)
Aggrieved person → SAT, within 45 days of receiving a copy of the order
SAT may condone delay if sufficient cause is shown. It should try to dispose of the appeal within 6 months.
Appeal against Tribunal order (section 61A)
Aggrieved person → NCLAT, within 45 days of receiving the order
No appeal lies from an order made with the consent of parties. NCLAT may condone delay for sufficient cause.
Appeal on capital structure scheme (section 6B)
Aggrieved shareholder or person → SAT, within 90 days of the order sanctioning the scheme
The decision of SAT, or of the officer if no appeal is made, is final and binding.
Appeal against Administrator's order (section 52BB)
Aggrieved person → SAT, within 14 days from service of the order
The order stays in force for 3 months unless an application is made under section 106. Transfers in breach are void.
Alteration in registration particulars (section 26)
Alteration → insurer furnishes full particulars to the Authority forthwith
Particulars must be authenticated. For changes to life insurance rates, advantages, terms or conditions, an actuarial certificate must accompany them.

How to solve Regulations, Offences and Penalties under the Acts questions

Use this method for any case question on penalties, orders or appeals under the insurance statutes.

  1. 1Identify the act or default and who committed it: insurer, intermediary, officer or another person.
  2. 2Identify the order passed and who passed it: the Authority, an adjudicating officer, the Administrator or the Tribunal.
  3. 3Name the correct forum: SAT for the Authority's orders (section 110), NCLAT for Tribunal orders (section 61A).
  4. 4State the time limit: 45 days from receipt of the order, or 14 days or 90 days for sections 52BB and 6B.
  5. 5Check whether delay can be condoned: yes, for sufficient cause under sections 110 and 61A.
  6. 6State what the appellate body may do: confirm, modify or set aside the order after hearing the parties.
  7. 7Conclude with the advice on practical compliance, such as filing the appeal in the prescribed form with the fee.

Quickest way: Order, forum, days

When to use it: Use this when the question asks only which forum or what time limit applies to a given order.

  1. Write who made the order.
  2. Write the forum for that order: Authority to SAT, Tribunal to NCLAT, Administrator to SAT.
  3. Write the days: 45, 45, 14 or 90, matching the section.
  4. Add one line on delay: sufficient cause allows late filing under sections 110 and 61A.

Common mistakes in Regulations, Offences and Penalties under the Acts

  • Saying every appeal must be filed within 45 days.

    Section 110 is the best-known provision, so students apply it everywhere.

    Fix: Remember 14 days for section 52BB and 90 days for section 6B.

  • Naming the High Court or the Central Government as the appellate forum.

    Older versions of the Act used those names.

    Fix: Use SAT for the Authority's orders. The Act has replaced the earlier forums.

  • Counting the 45 days from the date of the order.

    Students read it loosely.

    Fix: The period runs from the date the copy of the order is received.

  • Saying delay can never be condoned.

    Students overlook the proviso.

    Fix: SAT and NCLAT may entertain a late appeal if there was sufficient cause.

  • Stating penalty amounts or section numbers from memory without certainty.

    Students try to fill space in a long answer.

    Fix: Give only the figures and sections you are sure of, and explain the rule in plain words.

Worked examples

Example 1

IRDAI passes an order against Suraksha Life Insurance Ltd. The company receives the copy on 1 March. It wants to challenge the order. Advise on forum and time limit.

Show the solution
  1. The order is made by the Authority, so section 110 applies.
  2. The aggrieved person may appeal to the Securities Appellate Tribunal having jurisdiction.
  3. The appeal must be filed within 45 days from the date the copy of the order is received, here 1 March.
  4. It must be in the prescribed form with the prescribed fee.
  5. SAT will hear the parties and may confirm, modify or set aside the order.

Answer: Suraksha Life should appeal to SAT under section 110 within 45 days of receiving the order on 1 March, in the prescribed form with the fee.

Example 2

Mr. Rao's appeal against an IRDAI order reaches SAT on the 60th day after he received the order. Can SAT hear it?

Show the solution
  1. The limit under section 110(2) is 45 days from receipt of the order.
  2. The appeal is 15 days late.
  3. The proviso allows SAT to entertain a late appeal if it is satisfied there was sufficient cause for the delay.
  4. So admission depends on Mr. Rao showing sufficient cause.

Answer: SAT may hear the appeal only if it is satisfied that Mr. Rao had sufficient cause for the delay. Otherwise the appeal is time-barred.

Exam tips

  • Write the section number with the forum and the days. Marks follow the provision, analysis and conclusion sequence.
  • Keep a one-line table in your head: 110 is 45 days to SAT, 61A is 45 days to NCLAT, 6B is 90 days to SAT, 52BB is 14 days to SAT.
  • In case questions, first spot the type of order, then choose the forum.
  • Do not quote penalty amounts unless you are certain of them. Explain the rule and the procedure well.

Practice questions from Regulatory Framework in Insurance

Regulations, Offences and Penalties under the Acts in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Regulations, Offences and Penalties under the Acts: frequently asked questions

Where do I appeal against an IRDAI order?

You appeal to the Securities Appellate Tribunal having jurisdiction under section 110 of the Insurance Act, 1938. The appeal is filed within 45 days of receiving a copy of the order.

Can SAT accept an appeal after 45 days?

Yes, if it is satisfied that there was sufficient cause for not filing within the period. The proviso to section 110(2) gives this power.

How fast must SAT decide the appeal?

SAT should deal with the appeal as expeditiously as possible and endeavour to dispose of it within six months of receiving it. This is an endeavour, not a strict bar.

What is the appeal time under section 52BB?

An order of the Administrator can be appealed to SAT within fourteen days from the date the order is served. The order otherwise stays in force for three months unless an application is made under section 106.