RBI Grade BNABARD ESISEBI
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Context:
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The Insurance Regulatory and Development Authority of India (IRDAI) has imposed a monetary penalty of ₹1 crore on Acko General Insurance for multiple regulatory violations during FY 2019-20 and 2020-21.
Nature of Violations
- Violation of Section 40(1) of the Insurance Act, 1938:
- Prohibits insurers from making payments to anyone for procuring insurance business, except licensed insurance agents or intermediaries.
- Non-compliance with Outsourcing Guidelines:
- Acko was found to have improperly outsourced core activities to a third-party company without adhering to regulatory norms.
- Breach of Regulations on Commission and Rewards:
- Involves unauthorised payment of commission/remuneration/rewards to entities not licensed as agents or intermediaries.
Implications
- The penalty reflects IRDAI’s stringent stance on regulatory compliance within the insurance sector.
- Serves as a reminder to insurers to ensure all payments, outsourcing, and reward mechanisms are in line with statutory and regulatory provisions.
Background on Acko
- Acko General Insurance is a prominent digital-first insurer known for its tech-driven insurance solutions.
- This is among the first significant penalties levied on a new-age digital insurer by IRDAI, highlighting increasing regulatory scrutiny.
