IRDAI levies Penalty of Rs.2 Crore on HDFC Life for Violating Norms

The Insurance Regulatory and Development Authority of India (IRDAI) slapped a Rs.2 crore penalty on HDFC Life for violating multiple IRDAI regulations, according to a filing with the exchange.

According to the company, the penalty was imposed following an onsite inspection conducted by IRDAI in September 2020, which covered the financial years 2017-18, 2018-19, and 2019-20.

A penalty of Rs.1 crore was imposed for issues with the protection of policyholder interests. In addition, a Rs.1 crore penalty was issued for the company’s irregularities in outsourcing services.

The Company said on Thursday in its filing with the exchange, “IRDAI issued an order on August 1, 2024, levying a penalty in the aggregate of Rs. 2 crore for violation of terms of applicable IRDAI Regulations: Penalty of Rs.1 crore (Rupees One crore) for specific aspects of policyholder interest protection; Penalty of Rs.1 crore (Rupees One crore) for certain aspects of the Company’s outsourcing of services and payment of commission, remuneration, or reward for insurance business solicitation.”

In addition to the financial penalties, IRDAI has provided additional instructions and advisories to the insurance company HDFC Life. The organization has been instructed to follow these rules within a specific timeframe in order to correct detected problems and achieve regulatory compliance.

The Insurance Regulatory and Development Authority of India (IRDAI) is a statutory organization created by the Insurance Regulatory and Development Authority Act of 1999 (IRDA Act, 1999) to oversee and promote India’s insurance industry. The IRDAI’s mission is to protect policyholders’ interests while promoting the industry’s orderly expansion.