The Insurance Regulatory and Development Authority of India (IRDAI) has imposed a ₹1 crore penalty on Canara HSBC Life Insurance Company for mis-selling a life insurance policy to an 88-year-old man.
The case pertains to a deferred annuity policy, with an annual premium of ₹2 lakh and a four-year premium-paying term, that was sold by the insurer’s corporate agent, Canara Bank, in February 2025 to the senior citizen with his 57 year old daughter as the annuitant.
Initiating proceedings, suo motu, on a social media post, IRDAI observed that the product specified an entry age of 30 to 80 years. It further noted that adequate suitability and financial assessments had not been undertaken, despite the customer’s advanced age and the significant premium commitment involved. IRDAI also identified deficiencies in the verification call, proposal form, disclosure of policy features, and other aspects of the solicitation process.
The benefit illustration did not have verifiable acknowledgement by the policyholder, the customer information sheet and proposal form copy were not provided at the point of sale, premium was collected prior to policy issuance and the consequences of the proposer’s death during the premium-paying term were not adequately disclosed, the regulator said on Friday.
These deficiencies demonstrated failures in adherence to approved product features, suitability assessment, solicitation and verification, proposal processing, disclosure and internal controls, and constituted mis-selling and inadequate protection of the policyholder, it said.
When the matter came to its notice, the insurer met the policyholder and, at his request, refunded the full premium of ₹4.09 lakh, including the second-year premium, and reversed the commission. The insurer also undertook corrective measures, including revision of the product brochure, policy document and suitability assessment framework, and introduction of pre-issuance video-based validation calls.
The regulator said, after considering the facts and submissions, a penalty of ₹1 crore was imposed on Canara HSBC Life Insurance Company, for violations of the IRDAI (Protection of Policyholders’ Interests, Operations and Allied Matters of Insurers) Regulations, 2024, the IRDAI (Corporate Governance for Insurers) Regulations, 2024 and provisions of the Master Circular on Protection of Policyholders’ Interests, 2024.
IRDAI has also directed the insurer to undertake a comprehensive audit of policies sold to proposers/policyholders above 75 years of age through Canara Bank, strengthen the oversight framework governing its corporate agents and ensure full and effective implementation of the Bima-ASBA facility across all distribution channels.
Published – September 11, 2026 08:26 pm IST
