Hyderabad | August 6, 2025| SKY LINK TIMES
In a landmark action, the Insurance Regulatory and Development Authority of India (IRDAI) has imposed a ₹5 crore penalty — the largest ever in the sector – on Policybazaar Insurance Brokers Pvt. Ltd., a subsidiary of PB Fintech, for multiple regulatory violations.
The penalty was imposed under Section 102 of the Insurance Act, 1938, following an inspection by IRDAI which revealed 11 major compliance failures, including unauthorized directorships, improper policy tagging, outsourcing irregularities, delayed premium remittance, and lack of transparency in digital operations.
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📋 Major Charges Filed Against Policybazaar:
- Key Managerial Personnel (KMPs) and the Principal Officer held directorships in other companies, violating conflict of interest norms.
- Website ownership discrepancies: Policybazaar.com domain was owned by its parent company, not the licensed web aggregator.
- Unapproved clientele redirection from Paisabazaar.com to Policybazaar for insurance leads.
- Outsourcing charges of ₹104.59 crore collected without transparent justification; ₹24.81 crore invoiced for one month.
- Shared infrastructure costs with the parent company without formal agreements.
- Delayed insurance premium remittances beyond the 24-hour regulatory window.
- Failure to provide call recordings, raising red flags about possible mis-selling through call centers.
- Commission violations: Commissions received exceeded IRDAI-prescribed limits.
🧾 Background
The violations were unearthed during a remote inspection by IRDAI from June 1–5, 2020. Policybazaar received a Show Cause Notice in October 2024 and was granted a hearing and time for additional submissions. After extensive review, IRDAI issued the final order dated August 4, 2025.
The regulatory body concluded that Policybazaar failed to meet key compliance and transparency standards, and directed the company to take corrective measures in a time-bound manner.
In its defense, Policybazaar acknowledged certain lapses and stated that all key managerial personnel have now resigned from external directorships, outsourcing agreements have been terminated, and steps are being taken to meet IRDAI’s compliance directives.
🗨️ What IRDAI Said:
“The inability to extract policy solicitation records, delayed remittances, unauthorized lead diversion, and lack of domain ownership reflect serious governance failures… This penalty is aimed at ensuring robust compliance and customer fairness,” the order stated.
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