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IRDAI has imposed a total fine of Rs. 1.06 crore on Flipkart Internet Pvt Ltd (FIPL), a corporate agent, for violating regulatory norms.
According to IRDAI norms, Flipkart was permitted to sell insurance directly through its own Insurance Self-Network Platform (ISNP). However, the company’s website redirected users to an insurance agent’s page when they clicked the “Insurance/Buy Insurance” button. This redirection violates the rule that the platform must only directly connect with insurance companies.
Flipkart claims that the “Insurance/Buy Insurance” button was actually an advertisement for an insurance intermediary, for which it had received payment. In response, IRDAI stated that the practice constituted insurance redirection and is a violation of insurance regulations. The regulator fined Flipkart Rs. 1 crore for this breach.
In addition, Flipkart violated another regulation by conducting business without a valid license. The corporate agent’s license expired on September 25, 2024, yet it sold around 400 motor policies between September 26 and October 1. For this violation, the insurance regulator imposed a fine of Rs. 6 lakh.
IRDAI also highlighted the following concerns:
Insufficient staffing: Flipkart has only one specialised person (SP) managing over 70,000 policies in a single year.
Incomplete declaration: Flipkart did not submit the complete Schedule AA declaration required when foreign investors hold the majority of shares. Additionally, at that time, their board included only one resident Indian director out of two.