Let’s Connect

Order in the matter of M/s Reliance Nippon Life Insurance

The IRDAI (Authority) issued an order in the matter of M/s Reliance Nippon Insurance Company Limited (“Insurer” or “Company”) vide Order Ref. No. IRDAI/E&C/ORD/MISC/100/08/2025 dated October 17, 2025, with respect to the remote inspection conducted from August 10, 2020 to August 14, 2020. The Order follows the Show Cause Notice dated October 8, 2024, the Insurer’s reply dated November 18, 2024, and the personal hearing held on February 10, 2025.

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

Sr. No.ViolationObservations of the AuthorityDecision
1
  • Section 45(1) of the Insurance Act, 1938.
  • Clauses 6 and 7.3 of the Guidelines for Corporate Governance for Insurers in India.
  • Clause C of the Insurance Fraud Monitoring Framework dated January 21, 2013.
  • The Insurer cancelled 12 out of 99 sampled policies after the expiry of three years from policy issuance/risk commencement.
  • The cancellations were based on reasons such as cheque dishonour, non-disclosure of existing insurance, and non-contactability of the life assured, which do not fall within the grounds permitted under Section 45(1) of the Insurance Act.
  • In certain cases, the Insurer failed to notify policyholders regarding policy cancellation within the prescribed three-year period.
  • The Insurer treated non-response from policyholders to cancellation notices as deemed consent for cancellation.
  • The Insurer failed to establish adequate systems and internal controls to detect fraud and misrepresentation, contrary to the Corporate Governance Guidelines.
  • Although the 12 policy cancellations violated Section 45, the Insurer refunded the premiums and no claim-related incident was reported. The Authority also noted that no such cancellations occurred during the period from October 1, 2020 to December 31, 2024.
Warning & Advisory

  • The Authority cautioned the Insurer for violating Section 45(1) of the Insurance Act and Clauses 6 and 7.3 of the Corporate Governance Guidelines.
  • The Insurer has been advised to pay interest at the prevailing bank rate plus 2% on the refunded premiums from the date of cancellation until the date of refund.
  • The Insurer shall conduct an audit of its internal processes to ensure compliance with Section 45.
  • The audit must be carried out by an eligible Chartered Accountant (CA) Firm approved under IRDAI norms.
  • The audit is required to be completed within 180 days from the date of receipt of the Order.

Further Directions

  • Place the Order before the Board of Directors in the forthcoming Board Meeting and submit the relevant Board minutes to the Authority.
  • Submit an Action Taken Report (ATR) to IRDAI within 90 days from the date of the Order.
  • The Insurer may file an appeal before the Securities Appellate Tribunal under Section 110 of the Insurance Act, 1938, if aggrieved by the Order.

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

Source: IRDAI

Attachment

Comments are closed