IRDAI, by Order No. IRDAI/F&I/ORD/MISC/109/8/2026 dated 19 August 2026, warned Acko General Insurance Limited for exceeding the Expenses of Management (EoM) limits for FY 2024-25 and rejected its request for forbearance. The insurer’s allowable EoM was Rs.650.37 crore, while actual expenses were Rs.985.15 crore, resulting in excess expenditure of Rs.334.78 crore. IRDAI held that the insurer had not complied with Regulation 6 read with Regulations 10, 11 and 19 of the IRDAI (Expenses of Management, including Commission, of Insurers) Regulations, 2024. The insurer had cited lower-than-expected gross written premium, regulatory changes relating to 1/n premium recognition and initiatives to reduce EoM, but IRDAI did not accede to the forbearance request, noting that the insurer had previously received forbearance during its first five years and had also exceeded EoM limits in FY 2023-24. IRDAI directed the insurer, under Regulation 22(1)(b) and (c), not to open any new place of business for six months from the order date. The Order must also be placed before the insurer’s Board, with minutes submitted to IRDAI within 15 days of the meeting. IRDAI (Expenses of Management, including Commission of Insurers) Regulations, 2024 provides the governing regulatory framework. TaxGuru’s coverage of the governing framework is available in its IRDAI (Expenses of Management, including Commission of Insurers) Regulations, 2024 and Master Circular on Expenses of Management, including Commission, of Insurers, 2024.
Insurance Regulatory and Development Authority of India
Press Release | 20th August 2026
Orders in the matters of Acko General Insurance Limited and Niva Bupa Health Insurance Co. Limited for non-compliance with Expenses of Management limits
The Insurance Regulatory and Development Authority of India (IRDAI) passed Orders against Acko General Insurance Limited and Niva Bupa Health Insurance Co. Limited for exceeding the permissible Expenses of Management (EoM) limits prescribed under the IRDAI (Expenses of Management, including Commission, of Insurers) Regulations, 2024, following off-site monitoring, examination of the insurer’s submissions and subsequent enforcement proceedings.
IRDAI lays down strict expense limits for insurers to ensure prudential cost norms are followed. The expense of management includes both operational expenses and distribution costs. Insurers are expected to operate within those limits to ensure control on excessive operating and management costs and ensure that a reasonable portion of the premium collected is used for providing insurance coverage and paying claims. These limits help protect policyholders from unnecessarily high premiums, encourage insurers to operate efficiently, maintain their financial stability and solvency.
The insurers were warned for their failure to remain within the prescribed EoM limits and directed not to open any new place of business for a period of six months from the date of the Order, under Regulation 22(1)(b) and (c) of the EoM Regulations, 2024.
The insurers have also been directed to place the Order before their respective Boards in the upcoming Board meetings and submit a copy of the minutes of the discussion to IRDAI within the stipulated period.
The detailed Orders are available at IRDAI – Warnings and Penalties
IRDAI remains committed to ensuring that insurers operate within the regulatory guardrails governing their expenses, thereby promoting sound financial management, transparency and accountability across the insurance sector. The Authority will continue to take appropriate supervisory and enforcement action wherever regulatory non-compliance is observed.
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Insurance Regulatory and Development Authority
Order No. IRDAI/F&I/ORD/MISC/109/8/2026 | Dated: 19th August, 2026
Order of Insurance Regulatory and Development Authority of India in the matter of M/s Acko General Insurance Limited
Based on the:
1. IRDAI letter reference No. 796/F&I(NL)/EoM/2024-25/36 dated 15th January, 2026, issued to Acko General Insurance Limited (hereinafter referred to as “the insurer”).
2. Response of insurer vide their letter dated 27th January, 2026.
3. Submissions during the personal hearing on 30th January, 2026
Background
4. The Insurance Regulatory & Development Authority of India (herein after referred to as “IRDAI” or as “the Authority”) granted Certificate of Registration No. 157 dated 18th of September 2017 to M/s Acko General Insurance Ltd (herein after referred to as “the insurer”) to carry out General insurance business in India under Section 3 of the Insurance Act, 1938. In terms thereof, the Insurer was subject to the terms and conditions of the Certificate of Registration and was also required to abide by the provisions of the Insurance Act, 1938 (herein after referred to as the “Act”), the Insurance Regulatory and Development Authority Act, 1999, other directions issued by the Authority from time to time including by way of Regulations, Guidelines and /or Circulars.
5. The Authority on examination of Return on Expenses of Management (EoM) of the insurer for the financial year 2024-25 had noted that the actual expenses of the insurer exceeded the allowable expenses (EoM limits) by Rs.334.78 crore. It was also noted from the return that the excess expense was charged to Profit and Loss Account (Shareholders’ Account) as required under the Regulation 19 of IRDAI (Expenses of Management, including Commission, of Insurers) Regulations, 2024 (“EoM Regulations, 2024”).
6. The insurer had requested forbearance from the Authority for exceeding the EoM limits. In this regard, the Authority had received a recommendation from General Insurance (GI) Council vide letter dated 30th May, 2025 for consideration of the forbearance request of insurer submitted to GI Council vide letter dated 31st March, 2025.
Explanation sought, Reply and Personal Hearing
7. After examination of the EoM return and submissions made by the insurer, an explanation was sought vide letter dated 15th January, 2026 for non-compliance with the EoM limits for FY 2024-25 as specified under Regulation 19 of EoM Regulations, 2024.
“19. General or Health Insurer: Insurers carrying on General Insurance Business or Health Insurance Business shall ensure that its expenses of management are within the allowable limits on the overall basis. Where the General Insurer or Health Insurer has exceeded the limit of expenses of management, excess of such expenses shall be charged to Profit & Loss Account.”
8. The insurer submitted its reply vide letter dated 27th January, 2026 and requested for forbearance during the personal hearing held at IRDAI head office at Hyderabad on 30th January, 2026.
9. The non-compliance set out in the letter dated 15th January, 2026, the insurer’s written reply dated 27th January, 2026 and submissions made during personal hearing on 30th January, 2026 has been duly reviewed.
Observations:
10. The total allowable expenses of management for the FY 2024-25 were Rs. 650.37 crore. However, the company incurred actual expenses of Rs. 985.15 crore, thus exceeding the EoM limits by Rs 334.78 crore. In this connection, the insurer was advised vide letter dated 15th January, 2026 to explain, why its forbearance request is to be considered by the Authority and why appropriate proceedings should not be initiated under regulation 22 of IRDAI EoM Regulations, 2024.
Submission of the insurer:
11. The insurer requested the Authority to grant forbearance taking note of the reduction in gross written premium to Rs.2067 crore due to low growth in industry as against the expected Rs. 2,750 crore and the impact of regulatory changes on premium accounting with regard to 1/n premium recognition. Further, initiatives taken to bring down EoM from that of FY 2023-24 were also submitted by the insurer.
Decision of the Authority:
12. The Authority has carefully considered the material available on record, including the Return on Expenses of Management for FY 2024-25, the explanation furnished by the insurer vide its letter dated 27th January, 2026, the submissions made during the personal hearing held on 30th January, 2026, the insurer’s past compliance with the specified EoM limits and the circumstances cited by the insurer in support of its request for forbearance.
13. It is noted that the insurer was in its 7th year of operations during FY 2024-25. The insurer had already been granted forbearance vide IRDAI order No.216/F&A/NL/GAG/Com/01/2017-18 dated 7th March, 2018, during the first five years of its operations i.e from FY 2018-19 to FY 2022-23. The Authority further notes that, in respect of FY 2023-24, the insurer has exceeded the EoM limits and its request for forbearance had not been acceded by the Authority.
14. The insurer has again exceeded the EoM limits during FY 2024-25. Against the allowable expenses of Rs.650.37 crore, the insurer incurred actual expenses of Rs.985.15 crore, resulting in excess expenditure of Rs.334.78 crore. The insurer has not complied with the EoM limits specified at Regulation 6 read with Regulation 10, 11 & 19 of the EoM Regulations, 2024.
15. In view of the above facts and circumstances and after considering all the relevant materials on record, the insurer’s request for forbearance for financial year 2024-25 has not been acceded.
16. The insurer is hereby warned for its failure to ensure compliance with the applicable EoM limits for the FY 2024-25 and is directed not to open new place of business for a period of six months from the date of this order under Reg. 22 (1) (b) and (c) of the EoM Regulations, 2024.
17. This Order shall be placed before the Board of the Insurer in the upcoming Board Meeting and the Insurer shall provide a copy of the minutes of the discussion within 15 days of the meeting.
18. If the insurer is aggrieved by this Order, an appeal may be preferred to the Hon’ble Securities Appellate Tribunal in accordance with the provisions of Section 110 of the Insurance Act, 1938.
19. This Order is issued with the approval of the Authority.
Sd/-
(Rajay Kumar Sinha)
Member (F&I)
Place: Hyderabad
Date: 19th August 2026
Order in the matter of ACKO GIC Ltd
