IRDAI imposes Rs 2 Cr penalty on HDFC Life for violation of regulations

The Insurance Regulatory and Development Authority of India (IRDAI) has imposed a penalty of Rs 2 crore on HDFC Life for violating various IRDAI regulations, the company said in a filing to the stock exchanges.

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

A penalty of Rs 1 crore was imposed for matters related to protecting the interests of policyholders. Additionally, a penalty of Rs 1 crore was imposed for irregularities related to outsourcing of services by the company.

“IRDAI has issued an order dated August 1, 2024, imposing a total penalty of Rs 2 crore for violation of the provisions of applicable IRDAI rules: Penalty of Rs 1 crore for certain aspects relating to protection of interest of policyholders; Penalty of Rs 1 crore for certain aspects of outsourcing of services undertaken by the Company and payment of commission, remuneration or gratuity for sourcing insurance business,” the company said in a filing to the stock exchanges on Thursday.

In addition to the financial penalties, IRDAI has issued further guidelines and recommendations to insurer HDFC Life. The company has been directed to comply with these guidelines within a specified time period to rectify identified deficiencies and ensure compliance with regulatory standards.

Insurance Regulatory and Development Authority of India (IRDAI) is a statutory body established under the Insurance Regulatory and Development Authority Act, 1999 (IRDA Act, 1999) to supervise and develop the insurance sector in India. The objective of IRDAI is to protect the interests of policyholders and promote orderly growth of the industry.