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IRDAI Order in the matter of M/s Reliance General Insurance Co. Ltd.

The Insurance Regulatory and Development Authority of India (“IRDAI” / “Authority”) has issued an Order in the matter of Reliance General Insurance Company Limited (“Insurer” / “Company”), bearing Ref. No. IRDAI/E&C/ORD/MISC/145/12/2025, dated December 26, 2025, in relation to a remote inspection conducted by the Authority during the period from December 27, 2021 to December 31, 2021. A Show Cause Notice (SCN) was issued on November 29, 2024, and the Insurer submitted its reply on January 3, 2025, followed by additional submissions after the personal hearing on March 21, 2025. :contentReference[oaicite:0]{index=0}

The observations of the Authority and its decisions are summarized below:

Key Highlights of the Order

  1. Payments to Glitterbug Technologies Pvt. Ltd. (GTPL)
    • The Authority observed that during FY 2018-19, the Insurer paid approximately ₹5.16 crore to Glitterbug Technologies Pvt. Ltd. (GTPL), the parent company of Coverfox Insurance Broking Pvt. Ltd. (CIBPL), for “Consumer Awareness Programme” services. :contentReference[oaicite:1]{index=1}
    • The payments were found to be outside the agreed scope of services, and there was a common director between GTPL and CIBPL, raising concerns regarding outsourcing and conflict of interest. :contentReference[oaicite:2]{index=2}
  2. Payments to an Insurance Agent of Another Insurer
    • During FY 2018-19, FY 2019-20, and FY 2020-21, the Insurer made payments aggregating approximately ₹1.14 crore, ₹27 lakh, and ₹28.67 lakh, respectively, to an individual who was an agent of Oriental Insurance Company Limited. :contentReference[oaicite:3]{index=3}
    • The invoices related to customer awareness programmes and event organization, while promotional materials prominently displayed the agent’s name alongside the Insurer, creating the impression that the individual was authorized to solicit Reliance General Insurance policies. :contentReference[oaicite:4]{index=4}
  3. Payments to Suvidhaa Infoserve Pvt. Ltd.
    • The Authority observed that the Insurer paid approximately ₹2.92 crore, ₹5.33 crore, and ₹9.45 lakh during FY 2018-19, FY 2019-20, and FY 2020-21, respectively, to Suvidhaa Infoserve Pvt. Ltd. for marketing and advertisement services. :contentReference[oaicite:5]{index=5}
    • However, Suvidhaa Infoserve’s business activities primarily related to insurance services and premium collection, with no evidence of the marketing services contemplated under the agreement. :contentReference[oaicite:6]{index=6}
  4. Payments to Corporate Agents
    • The Insurer paid approximately ₹2.89 crore to Aditya Birla Housing Finance Limited and ₹2.36 crore to IndusInd Bank Limited in the nature of rewards or payments other than corporate agency commission. :contentReference[oaicite:7]{index=7}
    • The Authority observed that these corporate agents derived more than fifty percent of their revenue from non-insurance activities and were therefore ineligible to receive such rewards under the applicable regulations. :contentReference[oaicite:8]{index=8}
  5. Penalty and Directions
    • The Authority imposed a penalty of ₹1 crore on the Insurer and held that the payments constituted disguised commissions routed through marketing and awareness programmes, contrary to the applicable regulatory framework. :contentReference[oaicite:9]{index=9}
    • The penalty shall be remitted by debiting the shareholders’ account within 45 days from the date of the Order. :contentReference[oaicite:10]{index=10}
    • The Insurer has also been directed to:
      • Place the Order before its Board in the forthcoming Board Meeting and submit the relevant Board minutes to the Authority.
      • Submit an Action Taken Report (ATR) within 90 days from the date of the Order.

      :contentReference[oaicite:11]{index=11}

    • The Order is appealable before the Securities Appellate Tribunal under Section 110 of the Insurance Act, 1938. :contentReference[oaicite:12]{index=12}

A copy of the Order is attached herewith for your ready reference.

Source Category: IRDAI

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