Policybazaar Fined ₹5 Crore by IRDAI for Misleading Promotions and Rule Violations
Policybazaar Fined ₹5 Crore by IRDAI for Misleading Promotions and Rule Violations
New Delhi: The Insurance Regulatory and Development Authority of India (IRDAI) has imposed a fine of ₹5 crore on Policybazaar for breaking multiple rules related to fair promotion and selling of insurance products. The violations were found during an inspection by IRDAI, and the company was charged under various sections of the Insurance Act and the IRDAI (Insurance Web Aggregators) Regulations, 2017.
Misleading Promotions
According to the IRDAI order, Policybazaar promoted some insurance plans as “Top” or “Best” without giving customers full information or fair comparisons. On its website, it showed only 5 ULIP plans from selected insurers, even though it had agreements with more companies offering similar products. Similarly, in the health insurance section, it displayed “top plans” from 12 insurers while ignoring others.
IRDAI stated that such promotions create a biased view and are not allowed unless supported by verified third-party data. Terms like “Best”, “Top”, or “No. 1” can only be used if the ranking is based on transparent and factual information.
Delay in Premium Remittance
IRDAI also pointed out that Policybazaar delayed sending customer premiums to insurance companies. As per the rules, the premium must be transferred to the insurer within 24 hours, but in many cases, the delay went up to 30 days or more. For thousands of policies, delays ranged between 5 to 24 days, and for some over 77,000 policies, the money was sent after 3 working days.
Lack of Proper Record Keeping
Another major issue was that Policybazaar sold around 97,000 policies without linking them to an authorised verifier (AV). According to the rules, every policy sold through telemarketing must be recorded under the name of an authorised person who handled the sale. Failure to do so makes it unclear who was responsible for each transaction.
Policybazaar was functioning as an Insurance Web Aggregator (IWA) during the inspection period. It received a composite broker licence in February 2024.
IRDAI’s Warning
IRDAI reminded all insurance platforms that promoting certain products unfairly and delaying premium transfers harms customer trust. Aggregators must follow fair practices, ensure proper record-keeping, and give customers complete and unbiased information to make informed decisions.
