The Insurance Regulatory and Development Authority of India (IRDAI) has imposed a penalty of ₹1 crore on Reliance General Insurance Company for violation of certain regulations, including those related to outsourcing of activities and payment of commission, besides corporate governance guidelines.
One of the violations pertain to engaging an individual agent of another insurer for advertising and publishing services. “There was no transparency or clear rationale regarding how the agent was selected for this role… the insurer failed to justify their decision to engage the agent and make substantial payments,” the insurance regulator said in the December 26 order.
In its decision, on four charges, IRDAI said the payments made by the insurer were essentially overriding commissions and disguised as market awareness programmes, advertising activities and customer awareness initiatives to circumvent regulations.
The insurer has exposed itself to an increasing outsourcing risk and failed to show case that it has put adequate internal controls under Clause 6 of Guidelines for Corporate Governance for insurers in India, it said. The background to the order is a remote inspection of the insurer, by IRDAI, from December 27-31, 2021 that revealed certain violations of provisions of the Insurance Act, 1938.
Published – December 27, 2025 07:23 pm IST
