IRDAI acts on LocalCircles ask and restricts dark patterns on insurance platforms; Latest consumer complaints and LocalCircles study shows all major platforms riddled with them

September 24, 2026, New Delhi: Yesterday, the Insurance Regulatory and Development Authority of India (IRDAI) proposed prohibiting dark patterns under the insurance regulations through its consultation paper on “Recalibrating Economics of Insurance Distribution”. The regulator noted that product features and pricing are currently shown only after consumers provide personal details, terming it a dark pattern seen on most insurer and distributor websites and a violation of the Central Consumer Protection Authority (CCPA) guidelines under the Consumer Protection Act, 2019. IRDAI has proposed that all insurers disclose product, pricing and quality information in a standard, easy-to-understand form without seeking personal details, that dark patterns be tracked with relevant performance information made public, and that mis-selling incidents be placed in the public domain, with commission claw-backs where mis-selling is established. Comments are invited till October 25.

The proposal follows a sustained consumer ask raised through LocalCircles. On March 18, 2026, LocalCircles wrote to IRDAI Chairman Ajay Seth, citing a survey of over 87,000 consumers and an audit of over 20 platforms, requesting that, on the lines of the RBI mandate for banks, insurance aggregators and companies be barred from using dark patterns. On April 2, IRDAI directed regulated entities to self-assess compliance with the CCPA dark pattern guidelines within 15 days and submit an action plan within one month. When insurers reported finding no dark patterns, IRDAI engaged the Institute of Public Auditors of India (IPAI) to independently monitor dark patterns for nine months. In July, the IRDAI Chairman publicly flagged insurance websites that demand a consumer’s name, mobile number and consent to be contacted before revealing the price, the very practice now proposed to be prohibited.

On July 30 and again on September 22, 2026, LocalCircles wrote to IRDAI and CCPA seeking explicit inclusion of Privacy Zuckering in India’s list of dark patterns. Through this dark pattern, platforms extract more information than required and later use it to send pesky messages, present different quotes based on device type or renewal urgency, or in insurance, reject claims based on unauthorised information or the user’s location data, all without explicit consent. The consultation paper addresses the point at which such data is first harvested. In a LocalCircles survey of over 22,000 users of online insurance platforms, 77% said they frequently experienced Privacy Zuckering, with 59% experiencing it very frequently.

The broader LocalCircles study found that 90% of online insurance platform users surveyed experienced nagging (up from 86% two years earlier), 85% experienced forced action (up from 57%), 82% experienced bait & switch, 80% experienced subscription trap (up from 61%) and 65% experienced drip pricing or hidden charges. Based on consumer complaints and the LocalCircles AI-powered dark pattern detection engine, PolicyBazaar, Acko, ICICI Lombard, Tata AIG, Bajaj Allianz, HDFC Ergo, Royal Sundaram, Niva Bupa, Star Health, Go Digit, Turtlemint, Coverfox, InsuranceDekho, RenewBuy, Toffee Insurance and Universal Sompo were each found to have two to four dark patterns. Interface Interference was found on 70% or more platforms, while Forced Action, Bait & Switch and Subscription Trap were found on 30% to 70%.

LocalCircles welcomes the IRDAI proposal and urges that the final regulations explicitly name Privacy Zuckering or data misuse as a prohibited dark pattern, covering not only upfront data capture but also its downstream use for spam, differential pricing and claim repudiation. LocalCircles further urges that all insurance platforms (aggregators and companies) be required to submit a declaration to IRDAI that their app and web interfaces are dark pattern free, verified through independent third-party audits rather than self-declaration, and backed by penalties, public disclosure of violations and a consumer reporting mechanism. LocalCircles also reiterates its request to CCPA to add Privacy Zuckering to the 13 dark patterns notified in its 2023 guidelines.