Government appoints Ajay Seth as new IRDAI chief

MUMBAI: The government has appointed Ajay Seth, a retired 1987-batch IAS officer and former finance secretary, as the new chairperson of the Insurance Regulatory and Development Authority of India (IRDAI), for a three-year term or until he turns 65, whichever is earlier. The decision, approved by the Appointments Committee of the Cabinet, ends a nearly four-month leadership vacuum at the regulatory body.

Seth, who is the sixth IAS officer to head the regulatory body, has a long experience in economic policymaking. He most recently served as finance secretary, and before that, as secretary of the Department of Economic Affairs. He also briefly held charge of the Revenue Department, overseeing both direct and indirect tax administration. His earlier assignments include a stint at the Asian Development Bank and leadership of Bangalore’s metro project.

As a key architect of India’s post-pandemic macroeconomic policy, Mr Seth was responsible for shaping union budgets, issuing sovereign green bonds, and spearheading infrastructure finance initiatives. His elevation to IRDAI suggests that the government expects him to push through long-pending reforms in the insurance sector—some of which have been on hold since his predecessor, Debasish Panda, demitted office in March.

Seth will have to deal with considerable reform backlog. The much-touted Bima Sugam digital platform, designed to allow policy comparison and servicing in one place, has missed its rollout deadline. Bima Vistaar, aimed at rural coverage, and Bima Vahaak, a women-led distribution model, are caught in technical and governance snags. Transition to a risk-based capital regime and alignment with international accounting standards have also stalled amid industry unreadiness.

Larger proposals—such as permitting 100% foreign direct investment, introducing composite licences, and differentiated capital requirements—remain unlegislated. The idea of listing public sector insurers has met internal resistance and has not yet taken off. Solvency shortfalls at three state-run insurers further compound the regulatory burden.

He also takes over at a time when both the finance ministry and RBI have flagged concerns over mis-selling practices, particularly bundled products sold by banks and automobile dealers. Public criticism has grown over opaque claim settlements and low portability in health insurance.

There is pressure to emulate mutual fund reforms that brought cost transparency and trust back to retail investors. Mr Seth’s challenge will be to restore momentum to reform, clarify the regulatory roadmap, and reorient the sector towards long-term financial inclusion. With trust in the industry fraying and growth flattening, his stewardship will be closely watched.


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