Page 11 - The Insurance Times June 2025

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Update

it affordable for our people, it doesn’t
IRDAI Imposes Rs. 1 Crore Fine on Acko General In- matter what penetration percentage is,
surance for Regulatory Violations as long as we can reach out.”
The Insurance Regulatory and Development Authority of India (IRDAI) has Tapan Singhel, chairman of the Gen-
levied a penalty of Rs. 1 crore on Acko General Insurance for breaching eral Insurance Council, said India’s low
outsourcing regulations and violating norms related to commission, remu- insurance penetration rate was adding
neration, and rewards paid to agents and intermediaries. to the country's financial vulnerability.
In its order, the regulator directed that the matter be placed before the “Every time a catastrophe hits, millions
insurer's board at its next meeting, and a copy of the board's discussion remain unprotected,” he said.
minutes be submitted. Acko General has also been instructed to provide an
action taken report within 90 days of the order's issuance. Irdai raises concerns over
tweaks to show solvency
The penalty follows IRDAI's assessment that the company failed to comply
with the provisions governing outsourcing of insurance activities and com- ratio
pensation arrangements with its distribution partners, which are critical for he Insurance Regulatory and Develop-
ensuring transparency and fair market practices in the insurance industry.
ment Authority of India (Irdai) has ex-
This action underlines the regulator's emphasis on strict adherence to com- pressed concerns about a few life in-
pliance and governance standards. surers allegedly tweaking actuarial as-
sumptions to keep solvency ratios
above the 150% regulatory minimum,
IRDAI urges insurers to ance liya” (Did well by buying insurance). people familiar with the matter said.

cover India, not just quote Addressing industry leaders, Irdai The regulator issued a stern warning
member Deepak Sood said insurance to CEOs and appointed actuaries ear-
stats companies need to be more responsive lier where they raised concerns over
The Insurance Regulatory and Develop- to the changing nature of risk. “The undue pressure from company man-
ment Authority of India (Irdai) has called face of risk is changing every day,” said agements to revise assumptions to
on insurance companies to focus on ex- Sood, pointing to how the focus is shift- present stronger capital positions.
panding the number of people covered ing from conventional physical and The regulator is pushing for tighter
under insurance rather than merely im- business threats to new dangers like oversight during risk-based inspec-
proving overall penetration figures. cyber risks. “Cyber risks now sit in our tions, which began late 2024 with one
This push comes as the non-life insur- pocket, in our mobile phones,” he said. insurer as part of the quantitative im-
ance sector has pledged over ?300 Sood also said that pricing should not be pact study, and is now rolling out across
crore for an awareness campaign over the primary hurdle to expanding access. the industry to assess the impact
the next three years. The campaign “Premium could be anything,” he said. “If of risk-based framework's impact on
carries the tagline “Achha kiya insur- we can keep those premiums low, make solvency. T

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