The IRDAI (“ Authority ”) issued an order in the matter of M/s Policybazaar Insurance Web Aggregator Pvt Ltd. (now known as M/s Policybazaar Insurance Brokers Pvt Ltd.) (herein after referred as (“ IWA ” or “ Company ”) vide order bearing reference number IRDAI/E&C/ORD/MISC/88/07/2025 dated August 04, 2025 (“ Order ”), with respect to the Show Cause Notice (“ SCN ”) bearing reference number IRDA/ENF/2023/700/SCN/LR/059, dated October 07, 2024 issued by the Authority, and submission made by the IWA vide email dated November 12, 2024 in response to the SCN, and the personal hearing held on February 11, 2025, and further submissions made vide email dated February 26, 2025, respectively.
The observations raised by the Authority and decisions on these observations are summarized hereunder for reference:
1. Charge
Violation
Violations of:
a) Clauses 1(i), 2 and 3 (ii) of Form N under Schedule III read with Regulation 23 of IRDAI (Insurance Web Aggregators) Regulations, 2017 (“Regulations”) which reads as;
“1. An Insurance Web Aggregator shall disclose ………information, namely—
i. any change…. bearing on the certificate of registration granted to it;”
“2.An…..within 30 days of such change.”
“3 (ii). An…. Change in Director/s or Designated Partner/s as the case may be;”
b) Regulation 2(l) of Regulations read as below;
” Principal Officer” means……Aggregator
c) Clause 5 of the Undertaking of Form G under Schedule II read with Regulation 13(b) of Regulations read as below;
“Renewal Training Certificates….verifiers.”
Observation of the Authority
The Authority observed that:
- The IWA failed to disclose changes in its composition and directorships within 30 days as required under Clauses 1(i), 2, and 3(ii) of Form N, Schedule III, read with Regulation 23 and the argument that disclosure is required only upon IRDAI’s requisition was rejected, as self-disclosure obligations are clearly stated in the Regulations.
The IWA failed to disclose changes in its composition and directorships within 30 days as required under Clauses 1(i), 2, and 3(ii) of Form N, Schedule III, read with Regulation 23 and the argument that disclosure is required only upon IRDAI’s requisition was rejected, as self-disclosure obligations are clearly stated in the Regulations.
- IRDAI clarified that the regulations do not distinguish between insurance and non-insurance companies and any external directorship by KMPs/employees constitutes a material change needing disclosure and prior approval.
IRDAI clarified that the regulations do not distinguish between insurance and non-insurance companies and any external directorship by KMPs/employees constitutes a material change needing disclosure and prior approval.
- The Principal Officer (Mr. Manoj Sharma) held directorships in other companies, violating the exclusivity requirement as that the PO is exclusively responsible for activities and functions of IWA under Regulation 2(l) and Clause 5 of Form G, Schedule II.
The Principal Officer (Mr. Manoj Sharma) held directorships in other companies, violating the exclusivity requirement as that the PO is exclusively responsible for activities and functions of IWA under Regulation 2(l) and Clause 5 of Form G, Schedule II.
- The IWA did not obtain IRDAI’s prior approval before the Principal Officer took up external directorships, breaching the transparency and governance standards mandated.
The IWA did not obtain IRDAI’s prior approval before the Principal Officer took up external directorships, breaching the transparency and governance standards mandated.
Penalty
The Authority, in exercise of powers vested under Section 102(b) of the Insurance Act, 1938, imposed a penalty of ₹1,00,00,000/- (Rupees One Crore only) on the IWA.
2. Charge
Violation
Violations of:
a) Clauses b (iii) (a) (1) and b(iii) (a) (2) of Form P under Schedule IV read with regulation 31 of the Regulations;
b) Clause 1(a) (iv) of Form X under Schedule IX read with regulation 33 of the Regulations;
c) Regulation 2(k) of Regulations
Read as:
“Form P, Clause b(iii)(a) – Operate….websites
Regulation 31: The duties…regulations
Clause 1(a) (iv) of Form X – furnishes….registration
Regulation 33: The procedure….these regulations
Regulation 2 (k) “Person”……..Web Aggregator”
Decision of the Authority
The submissions of Company were taken on record and the charge was not pressed by the Authority.
3. Charge
Violation
Violations of Clause f of Form V under Schedule VIII read with regulation 32 of Regulations, read as:
“Clause f, Form V: not allow…. Authority
Regulation 32: The Insurance….102 of the Act”
Decision of the Authority
The submissions of the IWA were taken on record and the charge was not pressed further.
4. Charge
Violation
Violations of:
a) Clause c of Form Q under Schedule IV read with regulation 26 of the Regulations;
b) Clause b(ii) of Form P of Schedule IV read with Regulation 31 of IRDAI (Insurance Web Aggregator) Regulations, 2017;
c) Clause b of Form V of Schedule VIII read with Regulation 32 of IRDAI (Insurance Web Aggregator) Regulations, 2017.
Read as:
“Clause c, Form Q, Schedule IV: Insurance Web Aggregators….websites
Regulation 26: The conditions….regulations
Clause b(ii), Form Schedule IV: Display…website
Regulation 31: The duties…regulations
Clause b, Form V, Schedule VIII: prominently…website”
Observation of the Authority
The Authority observed that:
- The IWA violated regulations by ranking or endorsing insurance products (like ULIPs) of certain insurers over others with terms such as “best/top” without proper, verified, third-party data, leading to non-transparent product displays.
The IWA violated regulations by ranking or endorsing insurance products (like ULIPs) of certain insurers over others with terms such as “best/top” without proper, verified, third-party data, leading to non-transparent product displays.
- The IWA failed to provide material to help consumers make informed choices, thus misguiding them and promoting a limited set of insurer products over others.
The IWA failed to provide material to help consumers make informed choices, thus misguiding them and promoting a limited set of insurer products over others.
- The ranking system on the IWA’s website had the potential to mislead consumers and influence their decisions, leading to poor choices with potentially serious financial consequences.
The ranking system on the IWA’s website had the potential to mislead consumers and influence their decisions, leading to poor choices with potentially serious financial consequences.
- The IWA violated Clause c of Form Q and Clause b(ii) of Form P (Schedule IV) read with Regulation 26 by effectively advertising specific insurer products and displaying rankings or ratings, which is prohibited by the Regulations.
The IWA violated Clause c of Form Q and Clause b(ii) of Form P (Schedule IV) read with Regulation 26 by effectively advertising specific insurer products and displaying rankings or ratings, which is prohibited by the Regulations.
- The submission of IWA that the quoting of top products on the website was to increase insurance penetration and provide information relating to insurance products was not found tenable by the Authority.
The submission of IWA that the quoting of top products on the website was to increase insurance penetration and provide information relating to insurance products was not found tenable by the Authority.
Penalty
The Authority, in exercise of powers vested under Section 102(b) of the Insurance Act, 1938, imposed a penalty of ₹1,00,00,000/- (Rupees One Crore only) on the IWA.
5. Charge
Violation
Violations of:
a) Regulation 30(b)(ii) and (iv) of Regulations;
b) Clause 1(b) of Form U under Schedule VII read with regulations 2(j) and 30 of Regulations.
Read as:
“Regulation 30(b)(ii): Remuneration….leads…. intermediaries
Clause 1(b), Form U, Schedule VII: Outsourcing….parties
Regulation 2(j): “Outsourcing” …Schedule VII
Regulation 30: (a) The payment….(e)An Insurance……Section 41, 8”
Observation of the Authority
The Authority observed that:
- The IWA failed to comply with Regulation 30(b)(iv), Clause 1(b) of Form U, and Regulation 2(j) by not clearly defining the scope of services in outsourcing arrangements and charging “per seat” instead of on a “per service” basis. This raised concerns over the reasonableness of payments and transparency of outsourcing activities.
The IWA failed to comply with Regulation 30(b)(iv), Clause 1(b) of Form U, and Regulation 2(j) by not clearly defining the scope of services in outsourcing arrangements and charging “per seat” instead of on a “per service” basis. This raised concerns over the reasonableness of payments and transparency of outsourcing activities.
- IWA did not provide the data pertaining to solicited policies, leading to concerns that outsourcing payments were made for policies not sourced by IWA, violating Regulation 30(b)(ii) and Regulation 30(b)(iv), which require payments to be linked only to policies solicited by the IWA.
IWA did not provide the data pertaining to solicited policies, leading to concerns that outsourcing payments were made for policies not sourced by IWA, violating Regulation 30(b)(ii) and Regulation 30(b)(iv), which require payments to be linked only to policies solicited by the IWA.
- IWA was unable to justify the payments received from insurers, especially with payments made on a “per seat” basis without clarifying the actual services rendered. This violated Regulation 30(b)(iv) of the Regulations.
IWA was unable to justify the payments received from insurers, especially with payments made on a “per seat” basis without clarifying the actual services rendered. This violated Regulation 30(b)(iv) of the Regulations.
Penalty
The Authority, in exercise of powers vested under Section 102(b) of the Insurance Act, 1938, imposed a penalty of ₹1,00,00,000/- (Rupees One Crore only) on the IWA.
6. Charge
Violation
Violation of:
- Regulation 10(f), Regulation 25 and
- Clause b of Form O of Schedule IV read with Regulation 25
of IRDAI (Insurance Web Aggregator) Regulations, 2017, which reads as follows:
‘Regulation 10(f)
The registration granted … records and details by the Authority.’
‘Regulation 25
Insurance Web Aggregator …
… these regulations.’
‘Schedule IV – Form O (b)
An Insurance Web Aggregator … Authority on remote basis.’
Observation of the Authority
The Authority observed that the premium register for life insurance business, submitted by the IWA, lacked correct mapping of Authorized verifiers (Avs) for policies sold via telemarketing. It was noted that out of 4,32,366 policies sold through telemarketing, 97,780 policies were ‘unmapped’ or ‘unassisted.’ Further, the Lead Management System (LMS) lacked policy-wise tagging of the AV, making it impossible to determine who actually concluded the sale. It was concluded that the IWA did not submit any solicitation-related documents, such as call recordings, to confirm whether an AV conducted the sale in compliance with regulations.
Penalty and Advisory
The Authority, in exercise of powers vested under Section 102(b) of the Insurance Act, 1938, imposed a penalty of ₹1,00,00,000/- (Rupees One Crore only) on the IWA and Advisory for these violations.
7 and 9. Charge
Violation
Violation of
- Section 64 VB (4) of the 8 and
- Clause 3(iii) of the IRDA Circular no. IRDA/Life/Misc./Cir/106/05/2015 dated 17th May 2015,
which reads as follows:
‘Section 64VB (4)
Where an insurance agent … excluding bank and postal holidays.’
Observation of the Authority
The Authority has observed that
1. The IWA had collected insurance premium on behalf of insurers without due authorization by such insurers,
2. The IWA used its own Nodal Account and payment gateway, without the due approval of the Authority, for the transmission of insurance premium to insurers.
3. The insurance premium collected and remitted through the Nodal Account of IWA, are observed to be:
- Rs. 1671.24 Cr, amounting to approximately 95% of total insurance premium, remitted to insurers for FY 2019-20
- Rs. 1012.44 Cr, amounting to approximately 89.01% of total insurance premium, remitted to insurers for FY 2018-19
- Rs. 473.07 Cr, amounting to approximately 88.24% of total insurance premium, remitted to insurers for FY 2017-18.
4. The IWA remits insurance premium in minimum 3 working days, which is in violation of the timeframe of 24 hours of the receipt of the premium.
5. The IWA has delayed remittance of insurance premium to insurers.
- For 67 sample insurance policies, by more than 30 days, and
- For 8971 sample insurance policies, by 5 to 24 days
- For 77033 samples policies, after 3 days.
Penalty and Advisory
The Authority, in exercise of powers vested under Section 102(b) of the Insurance Act, 1938, imposed a penalty of ₹1,00,00,000/- (Rupees One Crore only) on the IWA and Advisory for these violations.
8
Violation of
- Clause 5(a) and Clause 5(d) of Form T of Schedule VI, read along with, regulation 29 of IWA Regulations,
Clause 5(a) and Clause 5(d) of Form T of Schedule VI, read along with, regulation 29 of IWA Regulations,
- Authority’s circular number IRDA / INSP / CIR / ONS / 157 / 09 / 2018 dated 19th September 2018
Authority’s circular number IRDA / INSP / CIR / ONS / 157 / 09 / 2018 dated 19th September 2018
which reads as follows:
‘ Schedule VI – Form T
Clause 5
a) The Insurance Web … tele-calls for a period of 5 years
d) The records … inspection by the Authority.’
‘Regulation 29
Insurance Web … generated from its designated website.’
The Authority has observed that the IWA has lacked in its compliance of maintenance of call recordings and adequate solicitation related documents. Further, it was observed that despite several reminders, the IWA has failed to provide call recoding even for a single case. In conclusion, the Authority has observed that the Company’s systems are not administratively capable to extract solicitation related documents w.r.t. policies sold to demonstrate the process.
Caution and Direction
The Authority, with respect to its inspection and observations, has cautioned the IWA for the lapse in regulatory compliance.
Further, the Authority has directed the IWA to carry out the audit of the process put in place in this regard and submit a certificate from CA firm that call records are maintained by IWA and are in retrievable format. The said audit shall be carried out for last three financial years starting from 2021-22
10
Violation of regulation 5(c) of IRDAI (Payment of Commission or Remuneration or Reward to Insurance Agents and Insurance Intermediaries) Regulations, 2016
Violation of regulation 5(c) of IRDAI (Payment of Commission or Remuneration or Reward to Insurance Agents and Insurance Intermediaries) Regulations, 2016:
which reads as follows:
‘Regulation 5(c)
The maximum commission or remuneration payable under health insurance products offered by general insurers or stand-alone health insurers is given in Schedule II.’
Caution and Advisory
The Authority has cautioned the IWA for lapse and has further advised it to comply with the extant guidelines / regulations issued by the Authority from time to time.
11
Violation of
- Regulation 3(a)(iv) of IWA Regulations, and
Regulation 3(a)(iv) of IWA Regulations, and
- Clause 7 of Undertaking under Form G of Schedule II read along with Regulation 13 of IWA Regulations
Clause 7 of Undertaking under Form G of Schedule II read along with Regulation 13 of IWA Regulations
which reads as follows:
‘Regulation 3(a)(iv)
For the grant of certificate … framed by the Authority.’
‘Schedule II – Form G
Undertaking
…
7. None of our Associate companies … intermediary registration/licence.’
Caution and Advisory
The Authority, with respect to its investigation and observation, has condemned the IWA for failing to conduct proper due diligence on their employees and instead relied on the employees to disclose the information themselves which highlights a deficiency in the internal controls and operational processes of IWA, reflecting lapses in their due diligence procedures.
Further, the Authority has cautioned the IWA for the lapse and is advised to comply with the extant guidelines / regulations issued by the Authority from time to time.
The Authority has also directed the IWA to:
- Remit the penalty of Rs. 5 Crores (Five Crores) within a period of 45 days from the date of receipt of this order through RTGS/NEFT.
Remit the penalty of Rs. 5 Crores (Five Crores) within a period of 45 days from the date of receipt of this order through RTGS/NEFT.
- Intimation the remittance to Shri Sanjay Kumar Verma, General Manager (Enforcement & Compliance) at the Insurance Regulatory and Development Authority of India, Survey No. 115/1, Financial District, Nanakramguda, Hyderabad 500032, email id enforcement@irdai.gov.in with a copy to accounts@irdai.gov.in
Intimation the remittance to Shri Sanjay Kumar Verma, General Manager (Enforcement & Compliance) at the Insurance Regulatory and Development Authority of India, Survey No. 115/1, Financial District, Nanakramguda, Hyderabad 500032, email id enforcement@irdai.gov.in with a copy to accounts@irdai.gov.in
- To place this particular order in the upcoming Board meeting and provide a copy of minutes of discussion.
- Submit an Action Taken Report within 90 days from the date of Order.
- File an appeal if the insurer feels aggrieved by any of the decisions in this order before the Securities Appellate Tribunal as per Section 110 of the Insurance Act, 1938.
To place this particular order in the upcoming Board meeting and provide a copy of minutes of discussion.
Submit an Action Taken Report within 90 days from the date of Order.
File an appeal if the insurer feels aggrieved by any of the decisions in this order before the Securities Appellate Tribunal as per Section 110 of the Insurance Act, 1938.
Source category: IRDAI
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