IRDAI fines PolicyBazaar ₹5 crore for six regulatory breaches
Delayed premium remittances by over 30 days violated 24-hour rule
Misleading “Top/Best” plan labels lacked verifiable third-party data
Thousands of policies lacked proper verifier tagging, record-keeping gaps
The Insurance Regulatory and Development Authority of India (IRDAI) has imposed a ₹5 crore penalty on insurtech major PolicyBazaar Insurance Brokers following a June 2020 remote inspection that uncovered multiple violations of insurance regulations.
The regulator’s final order, issued on August 4, 2025, cites failures ranging from leadership non‑disclosures to delayed premium remittances, raising serious concerns about consumer protection and market transparency.
IRDAI found that PolicyBazaar failed to inform the regulator that several key managerial personnel and its former principal officer held directorships in other companies. Such non‑disclosure contravenes norms requiring insurance web aggregators to report material changes in their leadership structure promptly.
Misleading Plan Labels
The regulator also flagged PolicyBazaar’s website for labelling certain insurance plans as “Top” or “Best” without objective third‑party data to substantiate those claims. IRDAI noted that such promotional designations could unduly influence consumer choices and are prohibited unless grounded in transparent, verifiable evidence.
Inspectors reviewed outsourcing contracts between PolicyBazaar and partnering insurers, revealing agreements that lacked clear definitions of service scope and rationale for fees. Many arrangements compensated PolicyBazaar on a per‑seat basis with no linkage to actual service delivery, undermining the principles of transparency and fairness in outsourcing relationships.
Weak Internal Record‑Keeping
A critical shortfall involved PolicyBazaar’s internal controls: thousands of policies were not tagged to the authorised verifiers responsible for their sale. Despite repeated IRDAI requests, the company could not furnish call recordings or documentation to confirm compliance with prescribed sales processes.
Perhaps most alarmingly, the IRDAI found that PolicyBazaar delayed remitting customer premiums to insurers beyond the mandatory 24‑hour window. In sampled cases, transfers were delayed by over 30 days, violating the core tenet that risk can only be assumed by insurers once premiums are received in full and on time.
Of the 11 charges identified, six attracted financial penalties of ₹1 crore each, while the remaining five resulted in formal warnings, advisories or mandates for corrective action. PolicyBazaar has been directed to present the IRDAI order to its board at the next meeting and submit a detailed compliance report within 90 days.
The fine coincides with parent PB Fintech’s strong Q1 FY26 financial results, reporting a 41 percent year‑on‑year rise in consolidated profit after tax to ₹84.7 crore and a 34 percent jump in operating revenue to ₹1 348 crore, bolstered by an exceptional gain of ₹41.1 crore.
