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The Insurance Regulatory and Development Authority of India (IRDAI) has imposed a penalty of ₹1 crore on Acko General Insurance for violations of certain regulations.
The action pertains to payments the insurer made, to a company during 2019-20 and 2020-21, in violation of Section 40(1) of the Insurance Act, 1938. It is also for violation of regulations related to outsourcing of activities as well as payment of commission or remuneration or reward to insurance agents and intermediaries.
Insurers must avoid or mitigate any conflicts of interest while outsourcing. Even where outsourcing is given to an intermediary, the insurer retains responsibility for all regulatory obligations and proper due diligence and monitoring of the outsourced service provider and the services provided. Adequate systems, policies and procedures to address potential conflicts of interest and compliance with the provisions of Companies Act, 2013 and the corporate governance guidelines of the Authority need to be established by the insurers, IRDAI said in the order.
The regulator directed the insurer to place the order before the upcoming board meeting and provide a copy of the minutes of the discussion. The insurer should submit an action taken report to the Authority on direction given within 90 days from the date of the order, IRDAI said.
Published – May 21, 2025 09:35 pm IST
