Page 10 - The Insurance Times September 2025

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While public sector banks have previ-
IRDAI imposes Rs. 3.39 crore penalty on Star Health
ously received regulatory relaxation
for cyber security lapses post their 2020 consolidation, this is the
The Insurance Regulatory and Development Authority of India (IRDAI) has first such case involving private insur-
levied a penalty of Rs. 3.39 crore on Star Health and Allied Insurance Com- ers. Sources indicate the regulator is
pany for violations related to information and cyber security protocols. Along weighing policyholder protection and
with the monetary penalty, the insurer has also received a formal warning market integrity in determining the
from the regulator. path forward. A final decision is ex-

This action comes amid increasing concerns about regulatory non-compli- pected after further scrutiny of Kiwi's
ance in the insurance sector, particularly in areas such as mis-selling and proposed business strategy and conflict
data protection. To ensure stronger enforcement, IRDAI has recently es- mitigation measures.
tablished specialised enforcement panels comprising whole-time members
to adjudicate on violations of the Insurance Act and related regulations. IRDAI fines Policybazaar
These panels aim to streamline accountability and ensure timely action on Rs. 5 crore for multiple
infractions by insurers and intermediaries. The regulatory crackdown is part
of a broader move to enhance consumer trust, data integrity, and trans- regulatory violations
parency across the insurance ecosystem. With cyber threats becoming more The Insurance Regulatory and Devel-
complex, IRDAI's stringent stance signals a greater emphasis on insurer ac- opment Authority of India (IRDAI) has
countability in safeguarding policyholder data and maintaining robust cyber imposed a record Rs. 5 crore penalty
resilience. on Policybazaar following a remote in-
spection conducted in June 2020,
IRDAI may curb Kiwi owns approximately 40% in Star Health which uncovered a series of regulatory
and Allied Insurance-India's largest violations.
Insurance's retail health standalone health insurer. The infractions included conflict of in-
plans over promoter over- As per IRDAI norms, a single promoter terest due to unauthorised director-

lap cannot hold a significant stake in two ships held by key managerial personnel,
The Insurance Regulatory and Devel- companies operating in the same seg- promotion of specific insurance prod-
opment Authority of India (IRDAI) is ment to avoid conflict of interest. The ucts as "best" without independent
likely to restrict Kiwi General Insur- situation is further complicated be- validation, irregular outsourcing ar-
ance from launching retail health insur- cause Star Health is a listed entity, and rangements, and lapses in call verifica-
ance products due to concerns of pro- retail investors could be impacted by tion and premium remittance proto-
moter overlap. WestBridge Capital, strategic dilution or competition from cols.
which holds a 60% stake in Kiwi, also a promoter-linked rival. Specifically, Rs. 1 crore was levied for

10 September 2025 The Insurance Times