This move comes on the back of an on-site inspection carried out at the company in September 2019, followed by a formal enforcement process. IRDAI noted that the violations were confirmed only after reviewing inspection findings, hearing out the insurer’s responses, and holding a personal hearing before a two-member panel of Whole-time Members.
The regulator’s press statement read that after going through the inspection results, the company’s explanations, and the hearing before the two-member panel, it concluded there were genuine breaches, spanning how activities were outsourced, how vendors were picked and vetted, how records were kept, and gaps in internal controls, governance and overall regulatory compliance.
This fine, amounting to ₹1 crore, has been levied under Section 102 of the Insurance Act, 1938. The breaches, IRDAI clarified, pertain to the IRDAI (Outsourcing of Activities by Indian Insurers) Regulations, 2017, along with the Guidelines on Corporate Governance for Insurers in India.
Beyond the financial penalty, IRDAI also flagged a few other compliance shortcomings and issued advisories on them, specifically around unallocated premium amounts and slow turnaround on free-look cancellation requests.
The insurer has now been told to present this order to its Board and file an Action Taken Report (ATR) with the regulator within the given timeframe.
Notably, this entire episode traces back to a 2019 inspection, with the enforcement process that followed taking a closer look at how well the company was sticking to regulatory norms.IRDAI framed this as part of its larger push to tighten governance across the insurance industry, safeguard policyholder interests, and push for greater transparency and accountability. It further warned that similar supervisory and enforcement steps will keep coming wherever violations are spotted.
