The Insurance Regulatory and Development Authority of India (IRDAI) has recently imposed a hefty ₹5 crore penalty on PolicyBazaar Insurance Brokers, citing multiple breaches of the Insurance Act, 1938, and Insurance Web Aggregator Regulations, 2017.
What’s the matter?
IRDAI’s order, issued August 4, 2025, stems from a June 2020 inspection when PolicyBazaar operated under an Insurance Web Aggregator license. The fines and regulatory actions stem from 11 violations, including:
- Misleading product rankings: Labelled select insurance plans as “Top” or “Best” without transparent criteria or third-party validation, potentially misleading consumers.
- Remittance delays: Collected premiums were sent to insurers with delays of up to 30+ days, violating the mandatory 24‑hour remittance rule.
- General governance lapses: Senior executives held undisclosed additional directorships; outsourcing and telemarketing setups lacked transparency; and many call records and verifier mappings were incomplete.
Market Response
Market reaction was immediate PB Fintech shares fell over 2% following the fine announcement. The company stated the ₹5 crore hit would not materially impact operations, and a compliance report will be presented to its board.
What Are Consumers Saying?
On Reddit, many users shared frustrations around misleading advice and aggressive sales tactics:
“PolicyBazaar is okay for comparison but never take their agents’ words as truth… think through before buying.”
“The agent told me reimbursement was included turned out it wasn’t. Now they’re emotionally pressuring me to drop my complaint.”
Issue & Impact
Issue | Impact on Users |
Misleading product labels | Consumers may choose suboptimal plans unknowingly |
Delayed premium remittance | Coverage gaps pose financial and legal risks |
Governance and compliance | Erodes trust in the aggregator model |
Summary
The ₹5 crore fine marks a crucial moment for PolicyBazaar, reflecting IRDAI’s strict stance on consumer protection and ethical conduct. As web-based insurance aggregators rise in relevance, maintaining transparency and regulatory compliance won’t be optional they are essential for trust and credibility.
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