The Insurance Regulatory and Development Authority of India (Irdai) has imposed a penalty of ₹1 crore on ICICI Lombard General Insurance for lapses related to outsourcing, vendor management, and corporate governance.

According to the regulator, the insurer failed to classify event management services involving agents of other insurers as outsourced activities, and did not report the related expenses.

The penalty stems from Irdai's 2019 inspection of the company, which found that ICICI Lombard had not properly classified and reported outsourced event management activities involving agents of other insurers.

Irdai is the statutory body that regulates and develops the insurance industry in India, and it conducts periodic inspections of insurers to ensure compliance with outsourcing and governance norms. Under Irdai's regulatory framework, insurers must maintain oversight of outsourced services and report related expenses accurately, since outsourced activities remain the insurer's responsibility even when performed by third parties. Vendor management and outsourcing norms are designed to ensure that functions delegated to external parties do not compromise governance, policyholder interests, or regulatory transparency. Penalties of this kind, while monetary, primarily signal regulatory expectations to the broader industry about classification and disclosure discipline in outsourcing arrangements.

ICICI Lombard General Insurance is one of India's leading private sector general insurance companies. The penalty arises from conduct identified in the 2019 inspection, and any further regulatory developments would depend on subsequent Irdai communications.

Source: Economic Times Markets