The Insurance Regulatory and Development Authority of India (IRDAI) has taken strict action against four insurers for breaching prescribed Expense of Management (EoM) limits during FY2024-25.
The insurers affected are Niva Bupa Health Insurance, Acko General Insurance, Edelweiss Life Insurance and Pramerica Life Insurance. IRDAI has directed each company not to open any new place of business for six months from the date of its respective order.
Insurers can continue serving customers, but repeated violations of expense-related rules can lead to regulatory restrictions.
EoM regulations put limits on expenses such as operating and distribution costs, including commissions. The objective is to encourage insurers to maintain financial discipline and ensure that excessive costs do not ultimately affect policyholders.
Reports indicate that the four insurers had also faced EoM breaches in the previous financial year, making the latest action particularly significant. Industry observers see the move as a sign that IRDAI is adopting a stricter approach towards regulatory compliance.
For customers, existing policies and regular insurance services continue as usual. However, the move sends a clear message that IRDAI is closely monitoring insurers’ expenses and regulatory compliance.