IRDAI Fines Flipkart ₹1.06 Crore Over Insurance Norms
Why in the news
The insurance regulator IRDAI penalised Flipkart for how it sold insurance on its platform and for selling policies while its registration renewal was pending.
Key facts
- Total penalty: ₹1.06 crore.
- Rules breached: Insurance E-commerce Guidelines, 2017 and the Corporate Agent Regulations.
- Flipkart’s Insurance Self-Network Platform (ISNP) was certified for direct solicitation, but the “buy insurance” button sent users to an intermediary’s webpage.
Penalty split
| Violation | Fine |
|---|---|
| Unauthorised solicitation through redirection beyond the ISNP certification | ₹1 crore |
| Selling policies without a valid Certificate of Registration (CoR) after applying for renewal | ₹6 lakh |
Findings
- IRDAI held that the redirection was not simple advertising but a breach of solicitation rules.
- Flipkart argued it only supplied ad space and had no intermediary agreements.
- It stopped redirecting once IRDAI raised the matter, but many policies had already been sold.
- About 70,000 policies came through a single specified person, drawing compliance concerns.
- The Walmart-majority-owned firm was also criticised for not filing an undertaking on related party transactions and for lacking a majority of resident Indian directors; no charge was pressed due to remedial action.
Next steps
- Pay the penalty within 45 days.
- Report the penalty to the Board of Directors.
- Appeal possible before the Securities Appellate Tribunal.
- Flipkart said it values compliance and governance and was studying the order.
Exam angle
- Regulator: IRDAI.
- Guidelines: Insurance E-commerce Guidelines, 2017.
- Appellate forum: Securities Appellate Tribunal.