₹1 crore fine penalty: Why did IRDAI penalise Canara HSBC for mis-selling insurance to an 88-year old? What went wrong

The Insurance Regulatory and Development Authority of India (IRDAI) has levied a ₹1 crore penalty on Canara HSBC Life Insurance Company Limited over mis-selling of a life insurance policy to an 88-year-old customer, according to a Moneycontrol report.

The regulator flagged several shortcomings in the sale, including failures related to product suitability, solicitation, disclosures and the insurer’s internal controls.

IRDAI takes suo-motu action over social media post

The regulatory proceedings began after IRDAI took suo motu cognizance of a social media post highlighting the sale of a deferred annuity policy to the senior citizen.

The policy involved an annual premium of ₹2 lakh payable over four years. It was sold through Canara Bank, the insurer’s corporate agent, while the customer’s daughter was named as the annuitant.

Policy sold despite customer being above permitted entry age

During its examination, IRDAI found that the approved product allowed customers to enter only between the ages of 30 and 80. However, the proposer was 88 years old when the policy was sold, the outlet reported.

The regulator also observed that the insurer had not carried out a sufficient assessment of the customer’s financial circumstances or whether the product was appropriate for him, despite his age and the sizeable premium commitment involved.

Verification, disclosures and paperwork flagged

IRDAI identified several other lapses in the sales process, including deficiencies in the verification call, proposal form and disclosure of the policy’s features.

The benefit illustration also lacked a verifiable acknowledgement from the policyholder. In addition, the Customer Information Sheet and proposal form were not handed over to the customer at the point of sale.

The regulator further noted that the premium had been collected before the policy was issued. It also found that the implications of the proposer’s death during the premium-paying period had not been adequately explained.

IRDAI proposed digital registry to make insurance sector more transparent

The IRDAI had proposed a Public Insurance Registry (PIR), a digital public infrastructure aimed at creating a more connected, transparent and efficient insurance ecosystem.

According to the regulator, the proposed registry was expected to reduce information gaps and encourage greater competition among insurers and other market participants. This was expected to drive innovation in products, competitive pricing, improved services and a better customer experience.

The proposal was aimed at furthering the objectives of the Sabka Bima Sabki Raksha Act, 2025, IRDAI had said in a release.

The regulator said the PIR was intended to strengthen consumer protection, improve market efficiency and expand insurance coverage, while supporting the next phase of reforms in the sector.

“The proposed PIR represents a significant step towards building a more connected, transparent, efficient and resilient insurance ecosystem,” IRDAI had said, adding that trusted information would serve as a foundation for better protection and innovation.

The consultation paper had followed a “user-centric approach” to enable simpler, data-driven insurance processes and decision-making.