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Irdai sets higher targets for rural, social, and motor TP coverage in FY27

Mumbai, Jul 25, 2025

Irdai raises insurance coverage targets for rural, social, and motor TP obligations in FY27. Insurers must cover more Gram Panchayats and increase motor vehicle insurance

The Insurance Regulatory & Development Authority of India (Irdai) on Friday issued a master circular raising the minimum specific cover for insurance companies under the rural, social, and motor third-party (TP) obligations for the financial year 2026-27 (FY27).

According to the master circular, every life, general, and standalone health insurance company will have to cover 15 per cent of lives under individual and/or group insurance policies in 25,000 Gram Panchayats allocated to them in FY26. However, this number will increase to 50,000 Gram Panchayats by FY27, with 25 per cent coverage for the Gram Panchayats allocated in the previous year and 10 per cent for newly added Gram Panchayats during the year.

Additionally, for motor TP obligations, in FY26, companies with a TP market share of up to 2 per cent should see a minimum 12.5 per cent increase in the number of goods-carrying, passenger-carrying vehicles, and tractors over the previous financial year, which should increase by 13.75 per cent in FY27.

Similarly, for companies with 2-5 per cent market share, there should be a 10 per cent increase in FY26 and 11 per cent in FY27. Insurers with 5-10 per cent market share are expected to see a 7.5 per cent increase in the number of vehicles insured over the last fiscal year, which should increase by 8.25 per cent in FY27.

Companies with over 10 per cent market share in the motor TP segment should see a 5 per cent increase in the number of vehicles insured in FY26 and a 5.5 per cent increase in FY27.

[The Business Standard]

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