IndusInd Bank slapped with ₹1 cr penalty by IRDAI for corporate agent norms violation

The Insurance Regulatory and Development Authority of India (IRDAI) has imposed a penalty of ₹1 crore on IndusInd Bank for violation of norms governing corporate agents.

The corporate agent, IndusInd Bank, failed to establish a dedicated, policyholder-facing grievance redressal framework, improperly relying on generic banking mechanisms rather than providing insurance-specific IVR or website channels. Further, after promising compliance during regulatory proceedings, it submitted representations and screenshots of a grievance portal that, upon test verification by the Authority, proved non-functional and failed to generate complaint acknowledgments, IRDAI said in a release on Friday.

The regulator directed IndusInd Bank to pay a penalty of ₹1 crore under Section 102 of the Insurance Act, 1938, for violation of Regulation 20(1) of the IRDAI (Registration of Corporate Agents) Regulations, 2015.

The action follows an onsite inspection conducted during June 2023 and subsequent enforcement proceedings. IRDAI said it has also issued cautions and advisories in respect of certain other compliance deficiencies, including deficiencies in renewal notices, disclosure of regulatory actions to the Authority and prescribed disclosures on the Corporate Agent’s website regarding its registration and role as an insurance intermediary.