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Irdai flags ICICI Lombard over ₹709.57 crore spending
The Economic Times··8 Sept
IRDAI penalised ICICI Lombard General Insurance over outsourcing lapses in a September 7 order. During FY19 the insurer incurred ₹709.57 crore under sales marketing and business support, of which about ₹35-37 crore went to individual agents of other insurers. IRDAI said the insurer used those agents for event management without adequate documents and failed to classify the work as outsourced.
Prism
What It Means For You
- ICICI Lombard must address regulatory gaps in how it reports outsourced event spending.
- Insurers must classify outsourced activities and report them in outsourcing returns.
- IRDAI said failing to classify the work avoided regulatory scrutiny in time.
What's Happening
- The penalty relates to payments under the sales marketing and business support head.
- ICICI Lombard said about ₹35-37 crore of the total was paid to other insurers' agents.
- IRDAI found the insurer lacked adequate supporting documents for the activities.
The Outsourcing Reporting Rule
- IRDAI requires insurers to report outsourced activities in dedicated regulatory returns.
- Event management services paid to external agents must be classified as outsourced work.
- The order was issued on September 7 against ICICI Lombard General Insurance.
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