The Insurance Regulatory and Development Authority of India (IRDAI) issued an order against Universal Sompo General Insurance Co. Ltd. following a remote inspection conducted from January 31 to February 11, 2022. The inspection revealed multiple regulatory lapses under various provisions of the Insurance Act, 1938, and IRDAI regulations. Four charges were examined based on the company’s responses and hearings held in February 2025. Under Charge 1, IRDAI noted improper closure of health insurance claims without final decisions and failure to provide inspection documents, cautioning the insurer to ensure all claims are either paid or repudiated and to reopen closed claims since April 2018. Charge 2 involved delayed refunds of proposal deposits, reflecting operational inefficiencies and lack of timely processes; the company was cautioned to prevent recurrence. Charge 3, regarding non-acceptance of cash premiums, was dropped after the insurer showed compliance with payment regulations. Under Charge 4, IRDAI found delays in motor claim settlements and failure to pay penal interest as required under Regulation 15 of the Protection of Policyholders’ Interest Regulations, 2017. The insurer was warned to strictly comply with timelines and interest provisions. IRDAI directed Universal Sompo to present the order before its Board and submit an action taken report within 90 days. Any future lapses would invite strict regulatory action. The insurer retains the right to appeal before the Securities Appellate Tribunal under Section 110 of the Insurance Act, 1938.
Insurance Regulatoty and Development Authority of India
Ref: IRDAI/E&C/ORD/MISC/125/11/2025
Order in the matter of Universal Sompo General Insurance Co. Ltd.
1. Based on the
1.1. Show Cause Notice (“SCN”) Ref. No. IRDA / Enforcement & Compliance / 2022-23 / 681 / SCN / LR / 021 dated 24th June, 2024 issued to M/s Universal Sompo General Insurance Co. Ltd. (‘Insurer’ or ‘Company’) in connection with the remote inspection conducted by the Authority from 31st January 2022 to 11th February 2022.
1.2. Submissions made by the Insurer vide email dated 22nd July 2024 in response to the aforesaid SCN.
1.3. Submissions made by the Insurer during the personal hearing held on 5th February, 2025, before a panel of two whole-time members of the Authority – Shri Deepak Sood (Member-Non-Life) and Shri Satyajit Tripathy (Member-Distribution).
1.4. Further submissions made by the insurer post-hearing vide email dated 24th February 2025.
2. Background
2.1. The Authority conducted a remote inspection of M/s Universal Sompo General Insurance Co. Ltd. (‘Insurer’ or ‘Company’) from 31st January 2022 to 11th February 2022. The inspection report, inter alia, revealed certain violations of provisions of the Insurance Act, 1938 and Regulations, Guidelines and Circulars issued thereunder.
2.2. A copy of the inspection report was forwarded to the Insurer on 13th September 2022 seeking their response and the insurer submitted their response vide email dated 19th October 2022.
2.3. On examining the submissions of the Insurer, an SCN was issued on 24th June, 2024. The Insurer replied to the SCN vide email dated 22nd July, 2024.
2.4. As requested by the Insurer, a personal hearing was granted on 5th February 2025 by the Panel of two whole-time Members of the Authority – Shri Deepak Sood-Member (Non-Life) and Shri Satyajit Tripathy (Member-Distribution).
2.5. On behalf of the Insurer, Shri Sharad Mathur, Managing Director and Chief Executive Officer, Shri Sameer Patwardhan, Chief Compliance Officer and Ms Varsha Gujarathi, Chief Customer Officer and on behalf of the Authority, Shri RK Sharma (Chief General Manager), Shri TV Rao (General Manager), Shri Sanjay Kumar Verma (General Manager), Shri Manoj Asiwal (Deputy General Manager), Shri Saket Gupta (Manager), and Shri Yash Arvind Patil (Assistant Manager) attended the hearing.
2.6. The submissions made by the Insurer vide email dated 19th October 2022, the response to the SCN vide email dated 22nd July 2024, the submissions during the personal hearing on 5th February, 2025 and the post hearing submissions vide email dated 24th February 2025, have all been carefully considered by the Authority and are summarized below:
3. Charge-1 (Inspection Observation_A-4)
3.1. Violation of
3.1.1. Regulation-27 (v) of IRDAI (Health Insurance) Regulations, 2016 by closing the claims in the books of insurer.
3.1.2. Para 4 (b) & 5 of IRDAI Circular No. IRDAI / INSP / CIR/ONS/157/ 09/2018 dated 19th September 2018 by not submitting the information and documents required by the inspection team during the course of inspection.
3.2. Inspection Observation_A-4
3.2.1. The insurer closed Health Insurance Claims where the requirements were pending from the Claimants / Insureds. Moreover, the insurer did not provide the information/documents to the inspection team during the course of inspection.
3.3. Summary of Insurer’s Submissions
3.3.1. The Insurer submitted that essential documents were required to assess claim admissibility and the amount claimed. The company issued at least three communications to the claimants and allowed 37 days from the date of first requirement / query letter for document submission before closing the claim. On an average, claims were closed after more than 30 days of the final reminder, with a defined process for reopening claims if claimants/policyholders respond to the pending requirements.
3.3.2. The four claims mentioned in the inspection observation were settled after receiving the necessary documents.
3.3.3. With regard to the observation on the impact on Solvency and profitability, the company submitted that, at the time of closing the claims, reserves pertaining to such claims were released. However, the Company continued to provide for all such closed claims, likely to be reopened, by way of IBNR/IBNER.
3.3.4. The insurer also submitted that they have aligned their internal process with immediate effect and are now either settling or repudiating claims, strictly in accordance with the terms and conditions of the Policy.
3.3.5. The non-submission of documents to the Authority was purely unintentional and due to inadvertent human oversight. The period of inspection coincided with the COVID-19 Pandemic, which caused significant challenges for the Company in retrieving documents and accessing its data and records.
3.3.6. During the personal hearing, the insurer reiterated that they are currently either settling or repudiating claims strictly in accordance with the terms and conditions of the policy. Following the hearing, an undertaking signed by the CEO and CCO of the Company to this effect was also submitted.
3.3.7. The Authority instructed the insurer during the personal hearing to submit a cause-wise analysis of claims that were closed but not reopened for the financial years 2018-19 to 2023-24. The insurer provided the following information:
3.3.7.1. Cashless requests for 12,300 claims were rejected, and policyholders were given the option to opt for reimbursement mode.
3.3.7.2. 9,980 claims were intimated but not registered due to the non-submission of documents by policyholders. These maybe due to reasons like treatment not availed by insured, cashless request received etc. and these claims were subsequently closed.
3.3.7.3. 5,180 claims were closed due to the absence of mandatory essential documents. On receipt of necessary documents these claims were paid. The company further commented that it has ensured that sufficient reserve was provided for these cases by way of IBNER.
3.3.7.4. 2,629 claims were identified as duplicates, having been mistakenly intimated twice by either the hospital or the insured.
3.3.8. The insurer asserted that the claims were not closed in view of solvency position and profitability of the Company as the impact of reopened claims on solvency is negligible. A working sheet showing the impact of the closing of the cases was submitted to the Authority.
3.4. Decisions on Charge-1:
3.4.1. By closing claims and subsequently reopening them for settlement, the insurer failed to act in a dutiful manner, potentially leading to unnecessary financial and emotional strain on the policyholders.
3.4.2. The insurer’s defense of citing COVID-19 for failing to retrieve documents and manage records is noted. While the pandemic posed challenges across industries, the insurer’s inability to adapt and process claims effectively reveals weaknesses in its business continuity planning. This lack of preparedness not only impacted operational efficiency but also put policyholders’ interests at stake.
3.4.3. 9980 claims being intimated but not registered raises concerns. Claims once intimated must be registered by the company. Further, the insurer admitted that 5,180 claims were closed due to the absence of mandatory essential documents, and these claims were paid after obtaining the required information and documents. This practice needs to be corrected by the insurer. In the extant regulation applicable on the date of this order the Authority has made it incumbent on the Insurance company to collect all documents from hospitals. Compliance with the extant regulations will ensure that such situations do not arise and policyholders are not put to any difficulty.
3.4.4. In view of the above, the insurer is cautioned against
3.4.4.1. closing claims in the books of the insurer without a final decision; and
3.4.4.2. any recurrence of similar lapse, in future, shall be viewed sternly and stringent regulatory action, as deemed appropriate, shall be taken by the Authority;
3.4.5. The insurer is further advised as under
3.4.5.1. that any claim intimated must be registered in their system.
3.4.5.2. Claims must be taken to their logical conclusion of either being paid or repudiated with appropriate reasons and options for redressal offered to policyholders in line with extant regulations.
3.4.5.3. reopen and review all claims closed from 1st April 2018 to date that have neither been paid nor repudiated, and ensure that the claims are settled in accordance with the terms and conditions of the respective policy.
4. Charge-2_Inspection Observation_D-27
4.1. Violation of
4.1.1. Regulations-8(6) and 8(7) of the IRDAI (Protection of Policyholders Interest) Regulations, 2017.
4.1.2. Para 4 (b) & 5 of IRDAI Circular No. IRDAI / INSP / CIR/ONS/157/09 / 2018 dated 19th September 2018.
4.2. Inspection Observation_D-27
4.2.1. It was observed that 76 of 1337 proposals were rejected during FYs 2019-20 and 2020-21 where the insurer failed to refund the amount of proposal deposit in respect of such proposals to prospects within 15 days from the date of underwriting decision on the Proposals.
4.3. Summary of Insurer’s Submissions:
4.3.1. The Insurer submitted that refund requests were triggered in the core system of the Company post rejection of proposals through multiple instances such as communication from underwriting decisions, direct request received from customers, request received from the marketing function/channel for refunds etc.
4.3.2. Further, there was a dependency on receipt of Customer account details, cancelled cheque etc. Upon the receipt of these, refunds were processed for genuine proposers.
4.3.3. To overcome the erstwhile cumbersome process, the Company integrated its Underwriting Security system with the MIS Inward system, whereby upon rejection of a proposal, intimation of the same automatically flows in to the internal system, thereby enabling the Company to facilitate timely refund of proposal deposits.
4.3.4. The system enables automated reporting and daily monitoring thereby ensuring timely identification of rejected policies and expediting the initiation of refunds.
4.3.5. During personal hearing, the insurer stated that they had reviewed all the cases related to refund of proposal deposit for the period from FY 2019-20 to FY 2023-24 and paid penal interest of Rs.2,27,609 against the refund amount of Rs.15,79,712 in respect of 149 cases of refund of proposal deposits.
4.3.6. Since the Authority instructed the insurer during the personal hearing to submit analysis and status of 51 (76 minus 25) cases, the insurer provided the following information post-hearing:
4.3.6.1. The data of 51 rejected case, wherein delay in refund of proposal deposit within the prescribed period of 15 days occurred, was reviewed in detail.
4.3.6.2. The Overall refund amount paid to policyholders for the said 76 cases was Rs.3.27 lakh along with penal interest of Rs.2.10 lakh.
4.3.7. The insurer also submitted post-hearing that there were delays of one year stemming from the former email-based refund request process, which was prone to missing emails during staff transition in respect of 3 out of 9 cases during FY 2022-23.
4.4. Decisions on Charges-2
4.4.1. The insurer’s submission that refund requests were triggered through various channels, such as underwriting decisions, direct customer requests, and marketing functions, reveals a lack of streamlined and consistent process for handling refunds. This indicates a reactive, rather than proactive, approach, leading to inefficiencies and delays.
4.4.2. The practice of receiving customer account details and cancelled cheques before processing refunds indicates gaps in the insurer’s operational efficiency. This is because the insurer should have obtained NEFT details of the prospects at the time of receipt of the proposal form.
4.4.3. The insurer confirms that they have taken steps and integrated the Underwriting Security system with the MIS Inward system to improve efficiency.
4.4.4. The system now enables automated reporting and daily monitoring, which should help in identifying rejected policies and initiating refunds more promptly. However, there is a considerable delay in addressing operational weaknesses and ensuring a smooth process for customers.
4.4.5. The insurer’s admission of delays up to one year due to a flawed email-based refund process and missed emails during staff transitions raises concerns and is noted. This process being prone to missed emails during staff transitions, reveals a lack of oversight and risk management.
4.4.6. The lapses in handling of refunds for proposal deposits during the period covered by inspection reveals operational inefficiencies which negatively impact policyholder servicing. The submission of the company that the systems have been integrated is noted and it is expected that such integration will rectify the anomalies noted in the inspection.
4.4.7. The Company is cautioned and advised to ensure that such lapses are not repeated. Any similar lapses in future shall be viewed strictly and invite regulatory action as deemed appropriate.
5. Charge-3_Inspection Observation_E-30
5.1. Violation of Regulation-3 (a) of IRDA (Manner of Receipt of Premium) Regulations, 2002.
5.2. Inspection Observation_E-30
It was observed that the insurer does not accept ‘cash’ towards payment of premium from its policyholders/prospects.
5.3. Brief summary of Insurer’s submissions
5.3.1. The Insurer submitted that they encourage their customers to make premium payment through ‘digital mode’ to mitigate the risk of counterfeit currency and money laundering. The company had issued 19 retail policies during 2021-24, where the premium was received in cash.
5.3.2. During the Covid period, accepting cash was avoided across the industry and this was also a reason to encourage the digital payment mode.
5.3.3. The insurer submitted that they accept premium through all modes as stipulated under respective regulations including ‘cash’. They confirmed that they had issued 19 retail policies during 2021-2024, where the premium was received in cash.
5.3.4. Further, Insurer informed that they have not received any customer complaints/grievances where the Insurer declined to offer insurance solely because the customer wanted to make the payment in ‘cash’ mode.
5.3.5. During the personal hearing, the insurer stated that 42 policies were issued from Financial Year (FY) 2019-20 to FY 2024-25 as per the following details where the payment mode was cash.
| Audit Period | 2022-23 | 2023-24 | 2024-25 | Total | |
| (2019-20 to 2021-22 | |||||
| Policies | 12 | 5 | 12 | 13 | 42 |
| Issued |
5.3.6. Post hearing, the insurer also submitted a copy of circular dated 8th February 2025 sensitising the Branch Operations and Central Operations Team about all modes of payment, including cash with the objective of clarity and consistency.
5.4. Decisions on Charge-3
5.4.1. While promoting digital payments is important, the insurer must still accept cash payments, especially when prospects or policyholders prefer them, or where digital infrastructure is lacking. The insurer must take all steps to ensure that customers are given a choice for mode of payment and that they do not face any difficulty if they choose to pay the premium by cash.
5.4.2. Since the insurer has substantiated by way of policies issued that cash is being accepted for premium payment the charge is not pressed.
6. Charge-4 (Inspection Observation_F-34)
6.1. Violation of
6.1.1. Regulation-15 (8) of IRDAI (Protection of Policyholders’ Interest) Regulations, 2017 due to delays in settlement of motor claims.
6.1.2. Regulation-15(10) of IRDAI (Protection of Policyholders’ Interest) Regulations, 2017 for not paying the interest for delayed settlement of claims.
6.2. Inspection Observation_F-34
6.2.1. There were delays in settlement of claims of more than 30 days from the date of receipt of survey report or additional documents from the insured. Moreover, no penal interest was paid by the insurer to policyholders/claimants for such delayed settlement.
6.3. Brief Summary of Insurer’s submissions
6.3.1. The Company submitted that they had subsequently paid penal interest in such 10 cases. The Company has initiated the process changes to track necessary compliances in terms of TAT and interest payment in case of breach, if any.
6.3.2. The company has duly monitored and paid penal interest for such delayed claims settled, over the financial years 2021-22, 2022-23 and 2023-24 as below:
| S. No. | Financial year | No. of Claims delayed | Amount of penal interest paid |
| 1 | 2021-22 | 120 | Rs.67,313 |
| 2 | 2022-23 | 93 | Rs.34,780 |
| 3 | 2023-24 | 19 | Rs.11,690 |
| Total | 232 | Rs.1,13,783 | |
6.3.3. The Company further submitted that they also had inbuilt system-based checks, to highlight claims breaching the designated TAT.
6.3.4. The insurer submitted post hearing that they have reviewed all the claims from FY 2018-19 to FY 2023-24 and penal interest has been paid on a total number of 5888 claims amounting to Rs.70.39 lakh where regulatory turnaround time was breached. In order to protect the interest of policyholders, the payments of penal interest were made @ 8.75% (Bank Rate_6.75% + 2%) to the claimants. This was despite repo rates declining to 4% in FY 2021-22 and FY 2022-23, with the highest repo rate recorded at 6.5% in FY 2023-24.
6.3.5. The insurer submitted an undertaking duly signed by CEO and CCO that there were only 5888 cases as mentioned above for the period from FY 2018-19 to 2023-24 and no delay was observed in any other cases.
6.3.6. The insurer also submitted that out of the above, 226 claims totaling Rs.7.01 lakh were rejected by the Banks. In these cases, letters were sent to the insured’s last known address, and follow-up calls were made. Efforts to contact intermediaries for updated bank details are ongoing. The insurer further submitted that an amount of Rs.7.01 lakh has been transferred to the Unclaimed Account.
6.4. Decision on charge-4
6.4.1. As per the IRDAI (Protection of Policyholders’ Interests) Regulations 2017, Regulation 15(9) specifies a time period of 30 days within which insurers must communicate their decision to the policyholder. It is also noteworthy that the regulations of 2017 provides that where more than 30 days are taken to communicate decision, Regulation 15 (10) outlines the penal interest that insurers must pay on delayed claims payments. The insurer is required to adhere to these provisions without exception.
6.4.2. The insurer failed to pay the penal interest envisaged in Regulation 15(10). The review of all the claims for the period from FY 2018-19 to FY 2023-24, was undertaken by the insurer after the Authority raised the issue of delays in settlement and thereafter corrective action has been initiated for the entire period.
6.4.3. Moreover, a similar inspection observation was made by the Authority during its inspection conducted between 26th September 2016 and 7th October 2016, in relation to Inspection Observation_12 (delay in settlement of claims). Though charges were not filed, a guidance was given to the insurer to comply by the provisions of regulations.
6.4.4. In view of the above, a warning is issued to the insurer to strictly comply by Regulation 15(8) and 15(10) of the IRDAI (Protection of Policyholders’ Interest) Regulations, 2017. Any deviation or failure will be viewed sternly and stringent regulatory action could be initiated as deemed appropriate by the Authority.
7. Summary of Decisions:
| Charge No. | Violation of Provisions | Decision |
| 1 | Inspection Observations_A-4
a) Regulation-27 (v) of IRDAI (Health b) Para 4 (b) & 5 of IRDAI Circular No. IRDAI / INSP / CIR/ONS / 157 / 09 / 2018 dated 19th September 2018. |
Caution and Advisory |
| 2 | Inspection Observation_D-27
a) Regulations-8(6) and 8(7) of the IRDAI (Protection of Policyholders Interest) b) Para 4 (b) & 5 of IRDAI Circular No. IRDAI / INSP / CIR / ONS / 157 / 09 / 2018 dated 19th September 2018. |
Caution and Advisory |
| 3 | Inspection Observation_E-30
Regulation-3 (a) of IRDA (Manner of Receipt of Premium) Regulations, 2002 |
Charge not pressed |
| 4 | Inspection Observation_F-34
Regulations-15(8) & 15(10) of IRDAI (Protection of Policyholders’ Interest) Regulations, 2017 |
Warning |
8. Further,
a) The 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.
b) The Insurer shall submit an Action Taken Report to the Authority as per the direction given within 90 days from the date of this Order.
9. If the Insurer feels aggrieved by this Order, an appeal may be preferred to the Securities Appellate Tribunal as per the provisions of Section-110 of the Insurance Act, 1938.
Sd/-
Deepak Sood
Member (Non-Life)
Sd/-
Satyajit Tripathy
Member (Non-Life)
Place: Hyderabad
Dated: 07th November, 2025
