The Insurance Regulatory and Development Authority of India (IRDAI) has imposed a fine of ₹2 crore on HDFC Life Insurance for breaching regulatory norms, the insurer said in an exchange filing late yesterday. The IRDAI identified violations related to policyholders' interests, interactions with web aggregators, and insurance distributors. The action was taken after the regulator conducted an onsite inspection of the company in September 2020, covering the financial years from 2017-18 to 2019-20.
Following this news, shares of HDFC Life opened lower at ₹699.35, down 1.9% against the previous closing price of ₹713.45 on the BSE, in sync with the weak broader market. The company’s stock closed 0.88% lower at ₹707.20 on the BSE today, taking its market cap to ₹1,52,117.26 crore at the time of reporting.
The regulator issued a show-cause notice to HDFC Life on August 1, 2024, after granting the company the opportunity to present its case through a personal hearing and submit additional documentation, and subsequently imposed a ₹2 crore fine following the review of the submissions and hearing. Of this total, ₹1 crore relates to issues concerning the protection of policyholders’ interests, and the remaining ₹1 crore pertains to problems with outsourcing services and payments for soliciting insurance business.
"This penalty does not affect the company's financial, operational, or other activities," HDFC LIfe said in the exchange filing.
Recently, NBFC major Bajaj Finance has been fined ₹2 crore by the IRDAI for regulatory violations. The fine was disclosed in a filing by the Pune-based company on July 16, following an inspection conducted by IRDAI from March 3 to March 5, 2021, covering fiscal years 2018 to 2020.
The regulator issued a show-cause notice to Bajaj Finance on March 14, 2024, after allowing the company an opportunity for a personal hearing and additional submissions. The ₹2 crore penalty comprises ₹1 crore for discrepancies in reporting commissions and professional fees, and another ₹1 crore for inadequate maintenance of customer documentation.
HDFC Life Insurance Ltd recently announced its quarterly results for the quarter ending June 2024. The insurance company reported a 15% rise in net profit, reaching ₹478 crore for the quarter ending June 2024. During this period, the company's private market share increased from 16.4% in Q1FY24 to 17.1% in Q1FY25. Additionally, its overall market share in individual weighted received premium (WRP) grew to 11.4%.
