The insurance sector is poised for major reforms with an increase likely in the foreign direct investment (FDI) limit from 74% to 100% besides key regulatory changes that could potentially transform the sector. The sector also faces some hard questions given the spike in health insurance premiums annually.
It is no coincidence that the government has appointed a soft-spoken team player and man of detail, Ajay Seth, as the chairperson of the Insurance Regulatory and Development Authority of India (IRDAI) at this crucial juncture. He will lead the post, lying vacant after the retirement of Debashish Panda on March 13, 2025, for three years. Seth is expected to inject a fresh lease of life into the insurance regulator and instil discipline among the regulated entities with the same flair as the Reserve Bank of India for banks. Given his vast experience in the financial sector, Seth’s tenure in IRDAI will likely set the bar a notch higher.
He has been part of the public finance and taxation domains for more than 20 years of his 38-year career, and in the social sector and urban transport and infrastructure domains for about three years each in different positions at the Centre, government of Karnataka and Asian Development Bank. The University of Roorkee (Mechanical Engineering) and Ateneo de Manila University (MBA) are his alma mater.
Colleagues, who have worked with him, say he is a demanding boss and is also very far-sighted. In the department of economic affairs, he would set short-term and long-term goals and pursue them relentlessly. He earned the Prime Minister’s Award for Excellence in Public Administration in 2013 for transforming commercial tax administration in Karnataka.
Carreer
An Indian Administrative Service (IAS) officer of the 1987 Karnataka Cadre, Seth assumed the position of economic affairs secretary on April 15, 2021 and continued till June 30, 2025, remaining at the centre of economic policy making for more than four years. There, he helped shape India’s macroeconomic policies, managed public finances, and acted as a bridge between the government and regulators like the Reserve Bank of India and the Securities and Exchange Board of India (SEBI).
He was designated Finance Secretary in March 2025, succeeding Tuhin Kanta Pandey, and briefly held additional charge as Revenue Secretary in late 2024. His leadership in the finance track of the G20 under India’s presidency, and initiatives like India’s first sovereign green bond issuance and the Infrastructure Finance Secretariat highlight Seth’s innovative approach to economic policy.
During India’s G20 Presidency in 2023, he worked tirelessly to build consensus in the Finance Ministers and Central Bank Governors (FMCBG) meeting in Gandhinagar. The meeting endorsed the roadmap for enhanced lending capabilities of MDBs, re-emphasising the need to address debt vulnerabilities and support a coordinated risk-based regulatory framework for cryptos.
A very private person, who demonstrates great restraint while interacting with the media, Seth steered the White Paper on economy published by the government in February 2024 narrating in great detail the “unenviable legacy” left behind by the previous dispensation, and asserted that it took some “tough decisions” to transform the country from the “fragile five” to the ‘top five’ in a decade under the Modi government.
Responsibilities as IRDAI chairman
As IRDAI chairman, he will oversee the implementation of the reforms proposed to be rolled out soon by the government. Besides raising the FDI limit to 100% from 75% and allowing composite licensing to undertake life, general, or health insurance under one entity, the Insurance Bill will also relax the current guardrails and conditions on the repatriation of dividends and key management personnel for foreign-owned insurance firms.
The government is of the view that the sector requires capital inflows to grow and raise the insurance penetration level in the country.
IRDAI will also play a key role as the government plans to move oversight of the National Health Claims Exchange (NHCX), a digital platform for processing health insurance claims, to the finance ministry from the health ministry to curb over-charging by hospitals from insured patients, leading to a rise in annual health insurance premiums. It will be regulated by the IRDAI. The government is understood to be concerned about the annual increase in health insurance premiums by as much as 20%, which is causing hardships for the poor and middle class and ultimately impacting insurance penetration.
Seth is expected to smoothen the insurance regulator’s coordination with key financial sector regulators like the RBI and the SEBI, say experts.