Summary: The Insurance Regulatory and Development Authority of India (IRDAI), by Order No. IRDAI/F&I/ORD/MISC/111/8/2026 dated August 20, 2026, declined Edelweiss Life Insurance Company Limited’s request for forbearance for exceeding Expenses of Management (EoM) limits for FY 2024-25. The insurer’s allowable expenses were ₹494.09 crore for Non-Participating (including Linked) policies and ₹239.50 crore for Participating policies, while actual expenses were ₹558.73 crore and ₹264.81 crore, respectively, resulting in total excess expenditure of ₹89.95 crore. IRDAI held that the insurer had not complied with the EoM limits specified under Regulations 7, 8, 10, 11 and 20 of the IRDAI (Expenses of Management, including Commission, of Insurers) Regulations, 2024. The insurer had sought forbearance, stating that its overall EoM ratio had reduced from 135% in FY 2021-22 to 112% in FY 2024-25. IRDAI noted that forbearance had also been declined for FY 2023-24. The insurer was warned and directed not to open any new place of business for six months under Regulation 22(1)(b) and (c). The Order must be placed before its Board, with minutes to be furnished within 15 days. The insurer may appeal to the Securities Appellate Tribunal under Section 110 of the Insurance Act, 1938. The applicable IRDAI (Expenses of Management, including Commission, of Insurers) Regulations, 2024 are available on TaxGuru.
Insurance Regulatory and Development Authority
Order No. IRDAI/F&I/ORD/MISC/111/8/2026 | Dated: 20th August, 2026
Order of Insurance Regulatory and Development Authority of India in the matter of M/s Edelweiss Life Insurance Company Limited
Based on the
1. IRDAI letter reference No. F&I/EoM-Life/FY 2024-25 dated 15th January, 2026, issued to Edelweiss Life Insurance Company Limited.
2. Response of insurer vide letter dated 27th January, 2026.
3. Submissions during the personal hearing on 29th 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. 147 dated 10th of May 2011 to Edelweiss Life Insurance Company Limited (hereinafter referred to as “the insurer”) to carry out Life 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 under Non-Participating (including Linked policies) segment exceeded the allowable expenses (EoM limits) by Rs 64.64 crore and under Participating segment exceeded the allowable expenses (EoM limits) by Rs 25.31 crore. It was also noted from the Return on Expenses of Management that the excess expenses was charged to Profit and Loss Account (Shareholders’ Account) as required under the IRDAI (Expenses of Management, including Commission, of Insurers) Regulations, 2024 (“EoM Regulations, 2024”).
6. The insurer, vide letter dated 27.01.2026, had requested forbearance from the Authority for exceeding the EoM limits. In this regard, the Authority had also received a recommendation from Life Insurance Council vide letter dated 27th March, 2025.
Explanation sought, Reply and Personal Hearing
7. After examination of the return and submissions made by the insurer, an explanation was sought vide letter dated 15th January, 2026 for non-compliance with the EoM limits as specified under Reg. 20(1) and 20(2) of the EoM Regulations, 2024 for FY 2024-25.
Regulation 20
1. Insurers carrying on life insurance business shall ensure that its expenses of management are within the allowable limits on the Participating policies on an overall basis. Where the Life Insurer has exceeded the overall limits of expenses of management for Participating policies, excess of such expenses shall be charged to Profit & Loss Account.
2. In case of Non-participating (including Linked) policies, the Life Insurer shall ensure that its expenses of management are within the allowable limits on an overall basis. Where the Life Insurer has exceeded the limits of expenses of management on overall basis for Non-participating (including Linked) policies, the excess of such expenses shall be charged to Profit & Loss Account.
Such allowable limits on an overall basis shall be calculated on the basis of specific limits stipulated in Regulation 8.
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 29th 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 29th January, 2026 have been duly reviewed.
Observations
10. The total allowable expenses of management of the insurer for the FY 2024-25 under Non-Participating (including Linked policies) segment were Rs. 494.09 crore and under Participating segment were Rs.239.50 crore. However, the insurer incurred actual expenses of Rs. 558.73 crore under Non-Participating (including Linked policies) segment and Rs.264.81 crore under Participating segment, thus exceeding the EoM limits by Rs. 89.95 crore.
In connection with the above, the insurer was advised to explain, vide letter dt. 15.1.2026, 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 that the overall EoM ratio has progressively reduced from 135% in FY 2021-22 to 112% in FY 202425 and has been driven by a series of focused initiatives aimed at enhancing frontline sales productivity and delivering sustainable premium growth.
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 29th January, 2026, the insurer’s past compliance status with the specified EoM limits and the circumstances cited by the insurer in support of its request for forbearance.
13. The Authority further notes that, in respect of FY 2023-24, the insurer had exceeded the EoM limits and the Authority had not acceded to the insurer’s request for forbearance.
14. The insurer has again exceeded the EoM limits during FY 2024-25. Against the allowable expenses under Non-Participating (including Linked policies) segment of Rs. 494.09 crore, the insurer incurred actual expenses of Rs. 558.73 crore. Under Participating segment, against the allowable expenses of Rs.239.50 crore, the insurer incurred actual expenses of Rs. 264.81 crore resulting in total excess expenditure of Rs.89.95 crore. The insurer has not complied with the EoM limits specified at Regulation 7 read with Regulation 8,10, 11 & 20 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 from the Board meeting held.
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/-
Member (F&I)
