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Order in the matter of M/s Acko General Insurance Ltd.

The IRDAI (“Authority”) issued an order in the matter of M/s Acko General Insurance Ltd. (herein after referred as “Insurer” or “Company”) vide order bearing reference number IRDAI/E&C/ORD/MISC/92/08/2025 dated August 14, 2025 (“Order”), with respect to the Show Cause Notice (“SCN”) bearing reference number IRDA/ENF/2021/579/SCN/LR/039, dated August 09, 2024 issued by the Authority, in connection with the inspection conducted by the Authority from July 13 to July 17 2020, after which submissions were made by the Insurer vide email dated August 20, 2024 in response to the SCN, and the conduct of a personal hearing held on October 03, 2024, and to which further submissions were made by the Insurer vide email dated October 10, 2024 and November 18, 2024, respectively.

The observations raised by the Authority and decisions on these observations are summarized hereunder for reference:

ChargeViolationObservation of the AuthorityDecision of the Authority
1Violation of Section 64VB (1) of the Insurance Act, 1938, which reads as –

Section 64VB (1)

No insurer shall assume any risk in India in respect of any insurance business on which premium is not ordinarily payable outside India unless and until the premium payable is received by him or is guaranteed to be paid by such person in such manner and within such time as may be prescribed or unless and until deposit of such amount as may be prescribed, is made in advance in the prescribed manner.

The Authority observed that –

  • The Insurer had an outstanding premium of Rs. 44.82 Lakhs as on March 31, 2020. Instances of negative advance insurance premium as observed by the IRDAI are as under:

The Insurer had an outstanding premium of Rs. 44.82 Lakhs as on March 31, 2020. Instances of negative advance insurance premium as observed by the IRDAI are as under:

S. No.Period of IssuanceNumber of instancesDays negative
1Jan 2020213-31 days
2Dec 201993-25 days
3Nov 2019147-18 days
4Jul-Oct 2019113 days
5Apr-Jun 2019123 days
  • Submissions made by the Insurer during personal hearing was considered not tenable by the Authority as the essence of Section 64VB (1) was violated by the Insurer in providing policies before commencement of coverage.

Submissions made by the Insurer during personal hearing was considered not tenable by the Authority as the essence of Section 64VB (1) was violated by the Insurer in providing policies before commencement of coverage.

  • The submissions of the Insurer for gaining relaxation under Rule 58, Insurance Rules, 1939, were dismissed by the Authority.

The submissions of the Insurer for gaining relaxation under Rule 58, Insurance Rules, 1939, were dismissed by the Authority.

  • Receive of “success tokens” from partners do not amount to receive of success token from the payment gateway.

Receive of “success tokens” from partners do not amount to receive of success token from the payment gateway.

  • The Insurer had taken corrective actions as indicated vide email dated October 10, 2024, and November 18, 2024.

The Insurer had taken corrective actions as indicated vide email dated October 10, 2024, and November 18, 2024.

Warning and Directory

The Authority has issued a warning to the insurer for violating Section 64VB (1) of the Insurance Act, 1938. The Insurer has been directed not to follow any business practice or process that is not in absolute or strict compliance of Section 64VB of the Insurance Act, 1938. Further, a warning has been stated, that any recurrence of similar lapse shall be viewed sternly and stringent regulatory actions shall be taken by the Authority, as deemed to be appropriate.

The Authority has also directed the Insurer to:

  • Place the Order before the Board of Directors of the Insurer in the upcoming Board Meeting and provide the copy of the Minutes of the Meeting of the discussion to the Authority.
  • Shall submit an Action Taken Report to the Authority on the warning issued within 90 days of the Order.
  • May file an appeal if 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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