IRDAI Takes Action Against Dark Patterns in Insurance Digital Platforms
IRDAI's Directive to Insurance Companies
The Insurance Regulatory and Development Authority of India (IRDAI) has issued a directive urging insurance firms to enhance their digital interfaces to prevent consumer manipulation. Companies are required to adhere to the guidelines set by the Central Consumer Protection Authority (CCPA) within a 15-day timeframe and submit their action plans for compliance within a month. This initiative aims to combat 'dark patterns'—design strategies that mislead users into making decisions they may not fully comprehend or intend.
Insurance platforms often create interfaces that complicate the cancellation of auto-renewals, display attractive prices while concealing additional costs, and inundate customers with calls, emails, or notifications. This can result in consumers purchasing policies without complete understanding or feeling trapped in unwanted plans. The IRDAI's directive mandates that these platforms align with CCPA guidelines, which categorize dark patterns as "unfair trade practices." Recently, the Reserve Bank of India (RBI) also released a draft notification titled “Responsible Business Conduct Amendment Directions, 2026,” requiring all banks to eliminate dark patterns from their online banking platforms by July 2026.
Survey Reveals Prevalence of Dark Patterns in Insurance Sales
Survey highlights dark patterns in insurance selling
This development follows a survey conducted by LocalCircles, which gathered over 87,000 responses from consumers across 341 districts, revealing the extent of the issue. The survey found that 80% of respondents faced challenges when trying to cancel their policies, a significant increase from 61% just two years prior. Additionally, 90% reported receiving persistent calls, SMS, or emails even after attempting to cancel their policies.
Moreover, 85% of participants indicated they were compelled to share excessive personal information, up from 57%. The survey also pointed out that 82% of users encountered discrepancies between the advertised and actual pricing or terms, while 65% reported discovering undisclosed charges late in the purchasing process.