Irdai fines ICICI Lombard Rs 1 crore for outsourcing, vendor management lapses
The Insurance Regulatory and Development Authority of India (IRDAI) has imposed a ₹1 crore penalty on ICICI Lombard General Insurance. The fine was levied due to lapses in outsourcing, vendor management, and corporate governance. Specifically, the regulator found that the insurer failed to properly classify event management services involving agents of other insurers as outsourced activities, and did not report the related expenses as required.
What this means
This penalty underscores IRDAI's increasing scrutiny over compliance with outsourcing and vendor management guidelines in the insurance sector. The regulatory action reinforces the expectation for all regulated entities, including banks with insurance subsidiaries or bancassurance operations, to maintain stringent corporate governance and transparent reporting practices for all outsourced activities. Non-compliance, even on classification, carries significant financial repercussions.
Most affected: Insurance Sector & Bancassurance
Key takeaway: Review internal policies and ensure strict adherence to outsourcing, vendor management, and corporate governance guidelines, especially concerning third-party engagements.
Get stories like this in your inbox every morning
Free daily brief — rates, RBI updates and the banking stories that matter, in 3 minutes.
More in this briefing
- Bank of Maharashtra, Canara Bank eye dollar debt issuance this month, bankers say
- RBL Bank to raise up to USD 1 bn from overseas investors
- Gold loans, consumer durables drive NBFC credit growth to 14.9% in July
- SBM Bank India plans 26% stake sale, appoints consultant
- RNFI Services gets RBI in-principle nod to operate as payment aggregator