PolicyBazaar Fined â‚ą5 Crore by IRDAI for Misleading Promotions and Regulatory Breaches.

Banking & Finance

On 4 August 2025, the Insurance Regulatory and Development Authority of India (IRDAI) imposed a â‚ą5 crore penalty on PolicyBazaar Insurance Brokers Pvt Ltd (formerly operating as an insurance web aggregator) for multiple violations under the Insurance Act, 1938, and the IRDAI (Insurance Web Aggregators) Regulations, 2017. The order also included directions, advisories, and cautions to ensure compliance with regulatory norms.


      - IRDAI’s remote inspection revealed 11 distinct violations, including biased and misleading product promotions, conflict of interest involving key managerial personnel holding unauthorized directorships, delays in remitting premium collections to insurers, and shortcomings in governance frameworks.

      - The regulator flagged instances where PolicyBazaar labeled certain insurance products as “Top” or “Best” without disclosing objective evaluation criteria or third-party validation. The platform displayed a limited set of Unit Linked Insurance Plans (ULIPs) and health policies, giving selective visibility and influencing consumer choice in absence of transparency.

     

Main Point :-   (i) PolicyBazaar was found to have delayed transferring collected premiums to insurers by several days—well beyond the 24-hour remittance requirement mandated by Section 64VB of the Insurance Act. This misuse of premium holding through its own payment gateways raised serious compliance concerns.

      (ii) Violations included non-disclosure of key managerial personnel holding directorships in other companies without prior IRDAI approval. Additional flagged issues comprised ambiguous outsourcing arrangements, improper tagging of policies to authorized verifiers, and lack of call-recording systems.

(iii) IRDAI has mandated that PolicyBazaar pay the ₹5 crore fine within 45 days. The watchdog also issued formal directions, advisories, and cautions, and allowed the company the option to appeal to the Securities Appellate Tribunal (SAT). PB Fintech (PolicyBazaar’s parent company) confirmed the action and stated an “action taken report” would be presented to its board.

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