IRDAI imposes Rs. 1 Crore Penalty on Edelweiss Life Insurance

• 26 Jun 2025
• 553 Views

The Insurance Regulatory and Development Authority of India (IRDAI) has slapped a penalty of Rs. 1 crore on Edelweiss Life Insurance (erstwhile Edelweiss Tokio Life Insurance). The penalty has been imposed by the insurance regulator on the insurer due to violations of corporate governance guidelines. 

IRDAI said that insurance companies must avoid or address any conflicts of interest at the time of outsourcing. It is the insurer company’s responsibility to fulfill all the regulatory obligations and conduct thorough due diligence and track the outsourced service provider. 

The market regulator said in its order that the insurer shall establish adequate systems, policies and procedures to resolve potential conflicts of interest and compliance with the provisions of Companies Act 2013.

IRDAI observed the insurer did not capture bank account details of policyholders at the proposal phase where the premium amount was beyond Rs. 10,000. Edelweiss Life Insurance said it has taken steps to fix the issue. However, the insurance regulator said the excuse that bank details are not necessary is inexcusable. 

It mentioned it has given clear instructions to the insurer to collect all the relevant bank account details from the proposer/insurer individual in the proposal form right from the beginning. Also, it warned that failure to comply with this rule will result in a serious action against the insurer in future.

Source: The Hindu