Insurance regulator IRDAI plans to constitute a fund management committee to oversee the governance, administration, utilisation and performance monitoring of its ₹800 crore Policyholders’ Education and Protection Fund (PEPF).Announcing this in a consultation paper on the proposed regulatory framework of the fund, the Insurance Regulatory and Development Authority of India said PEPF will be on the lines of such mechanisms, for depositors and investors, set up by other financial sector regulators.The PEPF, with a corpus of ₹800 crore, was constituted in March by IRDAI consequent to the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Act, 2025 mandating establishment of such a dedicated fund to promote policyholder education, safeguard policyholder interests and support other policyholder-centric initiatives.Making a case for the insurance sector to have the mechanism, IRDAI said other financial sector regulators have dedicated funds -- RBI the Depositor Education and Awareness Fund; SEBI the Investor Protection and Education Fund; PFRDA the Subscriber Education and Protection Fund (SEPF). The Ministry of Corporate Affairs has Investor Education and Protection Fund under the Companies Act.The absence of steady funding mechanism in insurance hampered the development of structured approach to insurance awareness and policyholder education. Thus, such activities depended on discretionary regulatory and insurer spending, without a coordinated framework, IRDAI said.Inviting comments and suggestions, on the consultation paper, IRDAI said the proposed regulations seek to establish a structured and sustainable framework for enhancing insurance awareness, strengthening policyholder protection, improving grievance support systems and leveraging technology to deliver better policyholder services.The investment income generated from the Fund corpus can be utilised for insurance literacy and awareness programmes, strengthening grievance redressal mechanisms, developing technology-enabled services for policyholders. The services include proactive alerts during natural calamities and other emergencies, as well as creating systems to facilitate tracing and recovery of unclaimed insurance amounts, the insurance regulator said.As envisaged under the Act, the Fund shall comprise grants and donations from the Central and State Governments, IRDAI and other sources, amounts realised through penalties under insurance laws, and other sums specified through regulations.IRDAI said a significant proportion of policyholders do not fully understand what they have purchased, how to renew it, or how to make a claim. The consequences are immense such as the unclaimed amounts of more than Rs.9,305 crore held by insurers at the beginning FY2025. The amount consists of maturity proceeds, death claims and surrender values that policyholders or their nominees were unaware of or could not recover. Published - June 23, 2026 09:47 pm IST