IRDAI Fines Nissan Renault ₹1 Crore Over Distribution Fee Disclosure Lapses

IRDAI Imposes ₹1 Crore Penalty on Nissan Renault Financial Services India Pvt. Ltd. Because as Agreements Lacked Distribution Fee Details  

The Insurance Regulatory and Development Authority of India (IRDAI) passed an order against Nissan Renault Financial Services India Pvt. Ltd. following an onsite inspection conducted in September 2024. The inspection identified several compliance issues relating to insurance distribution, premium remittance, Motor Insurance Service Provider (MISP) agreements, monitoring of MISPs, and grievance redressal systems. Charges relating to tagging of policies to authorized personnel and customer consent for extended warranty policies were not pressed after the company provided explanations, undertakings, and system improvements. Regarding delayed premium remittance, IRDAI cautioned the company and advised continued compliance. However, IRDAI found serious deficiencies in MISP agreements that failed to specify distribution fees, weak governance controls, inadequate monitoring, non-compliance with reconciliation requirements, and deficiencies in MISP oversight. For these violations, IRDAI imposed a penalty of ₹1 crore under Section 102 of the Insurance Act, 1938. The company was also warned for shortcomings in its grievance redressal mechanism and directed to strengthen complaint handling processes and submit an action taken report.

Insurance Regulatory and Development Authority of India

Ref: IRDAUE&C/ORD/MISC/077/05/2026

Dated: 27th May 2026

Order in the matter of Nissan Renault Financial Services India Pvt. Ltd.

1. Based on the

1.1. Show Cause Notice (`SCN’) Ref. No. IRDAI / Enforcement & Compliance/ 2024-25/777/SCN/LR/006 dated 8th December, 2025 issued to M/s Nissan Renault Financial Services India Pvt. Ltd. (Corporate Agent’ or `CA’ or `Company’) in connection with the onsite inspection conducted by the Authority from 17th September 2024 to 20th September 2024.

1.2. Submissions made by the Corporate Agent vide email dated 30th December 2025 in response to the aforesaid SCN.

1.3. Submissions made by the Corporate Agent during the personal hearing held on 1 1 ^th March, 2026, chaired by a panel comprising two whole-time members of the Authority — Shri Rajay Kumar Sinha, Member (F&I) and Shri Swaminathan lyer, Member (Life).

1.4. Further submissions made by the Corporate Agent post-hearing vide email dated 20th March 2026.

2. Background

2.1. The Authority had conducted the onsite inspection of the Corporate Agent from 17th September 2024 to 20th September 2024. 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 Corporate Agent on 1st November 2024 seeking their response and the Corporate Agent submitted their response vide email dated 4th December 2024.

2.3. On examining the submissions of the Corporate Agent, an SCN was issued on 8^th December, 2025. The Corporate Agent replied to the SCN vide email dated 30th December, 2025.

2.4. As requested for by the Corporate Agent, a personal hearing was granted on 11th March 2026 by the panel comprising Shri Rajay Kumar Sinha, Member (F&I) and Shri Swaminathan lyer, Member (Life).

2.5. On behalf of the Corporate Agent, Shri Chandrasekaran Vijay Gopal, Interim Chief Finance Officer, Shri Chirag Soni, National Manager and Ms Twinkle, Principal Officer and on behalf of the Authority, Shri R K Sharma (Chief General Manager), Shri Sanjay Kumar Verma (General Manager), Shri Manoj Asiwal (Deputy General Manager) and Shri Yash Arvind Patil (Assistant Manager) attended the hearing.

2.6. The submissions made by the Corporate Agent in its email dated 4th December 2024, the submissions made in response to the SCN vide email dated 30th December 2025, submissions made during the personal hearing on 11th March 2026 and further submissions made post hearing vide email dated 20th March 2026 have carefully been considered by the Authority and are summarized below:

3. Charge-1 (Inspection Observations-1)

Violation of

3.1. Regulation-14 (vi) of IRDAI (Registration of Corporate Agents) Regulations, 2015.

3.2. Regulation-18 (b) (xix) of IRDAI (Minimum Information Required for Investigation and Inspection) Regulations, 2020.

Inspection Observation-1

3.3. While examining the premium register maintained by the Corporate Agent, it was observed that 1,813 policies sold by the CA were not tagged to any Specified Person (SP) or Designated Person (DP) or Motor Insurance Service Provider (MISP), indicating sale by unauthorized personnel. Upon reviewing the documents of 22 proposal forms on a sample basis, it was further observed that the proposal forms were not tagged to any SP for solicitation by the CA or to any designated person for solicitation by the MISP.

Brief of Submissions made by the Corporate Agent

3.4. The CA submitted that during inspection, the downloaded version of policy register didn’t capture the DP/SP records as per the template prescribed by the Inspecting team. The CA also submitted that they had fixed the system issue and corrected the data. The corrected data for 1,813 cases and Screen shots of 22 cases were provided to validate on CA’s system.

3.5. During personal hearing, the Corporate Agent submitted that SP/DP have login IDs to access the Corporate Agent’s system, through which they are required to enter the necessary details before soliciting any insurance policy. The Corporate Agent further clarified that entering these details in the systems are mandatory prior to the solicitation of any insurance policy and all the insurance policies are solicited through this online portal and no policies are solicited manually.

3.6. Post-hearing, the Corporate Agent submitted an undertaking signed by its Principal Officer and Interim CFO that their system controls are placed to ensure mandatory capture of MISP details and the system architecture has been configured that no insurance proposal can be processed without valid SP/DP tagging.

Decision

3.7. The submissions of the Corporate Agent have been taken on record and the charge is not pressed.

4. Charge-2_Inspection Observation-4

Violation of

4.1. Regulation-24 (1) of IRDAI (Registration of Corporate Agents) Regulations, 2015

Inspection Observation-4:

4.2. It was observed that there were 8,834 instances of delayed premium remittance to the insurance companies. The premium received through electronic mode was submitted by CA and it was observed that 131 cases the premiums collected from customers were not remitted within the stipulated timeframe i.e., 24 hours.

Submission of the Corporate Agent

4.3. The Corporate Agent submitted that out of 8,834 instances, premiums for 8,703 policies were remitted through cheque mode complying with Section 64VB of the Insurance Act 1938.

4.4. Of the 131 cases, policy issuance delays in 74 occurred solely due to insurer-side issues (e.g., KYC, NCB, or IC service downtime). The CA submitted that they supplied all underwriting information and premiums were received before the Risk Start Dates (RSD). Delays were resolved after interaction with the insurer, thus not constituting any 64VB violation. These 74 cases were found compliant, as payments were received before the RSD date, though issuance occurred later due to insurer proposal rejections that were subsequently resolved.

4.5. Regarding the remaining 57 cases, KYC verification delayed premium processing to ensure compliance before insurer risk assumption. For instance, in policy no. 992992323740001208, the premium was paid only upon KYC completion on April 4, though received earlier on March 30. Such delays were informed to customers and resulted from their pending compliance. Some new car policies faced CKYC errors, where proposal creation dates were captured as premium receipt dates, creating a false impression of delay. The technical issue has since been fixed.

4.6. During personal hearing, the Corporate Agent acknowledged that KYC-related delays were due to enhanced regulatory compliance rather than operational inefficiencies between January 2023 and June 2023 only and there is no single case of delay beyond this period.

4.7. The Corporate Agent, post personal hearing, submitted an undertaking signed by its Principal Officer and Interim CFO that

4.7.1. no insurance policy is issued without premium received in advance by the insurer or proper credit controls;

4.7.2. all premiums are remitted real-time via electronic modes at policy issuance or promptly deposited for cheques;

4.7.3. To strengthen systems, they have implemented automated remittance validations with tracking of premium receipts and payment modes, plus system alerts for portal blocking if pay-in slips are not generated within 12 hours or for delays beyond timelines;

4.7.4. They adhere to Policyholder Protection Guidelines by clearly disclosing their Corporate Agent identity, ensuring premium transparency, issuing no policies without valid collection, and communicating clearly with policyholders;

4.7.5. For compliance of provisions of Section 64VB of Insurance Act 1938, they conduct periodic monitoring of remittance timelines.

Decision:

4.8. The Corporate Agent is cautioned for the lapses and advised to ensure continued compliance with the relevant provisions of the respective regulations and Master Circulars issued by the Authority from time to time.

5. Charge-3_Inspection Observation-6

Violations of

5.1. Clause-9 (a) of Annexure-2 to be read with Clause-10(n) & 14(f) and Clause-15 (1) & 15 (5b & 5c) of Guidelines on Motor Insurance Service Provider issued by IRDAI vide Ref: IRDNINT/GDL/MISP/202/08/2017 dated 31st August 2017.

Inspection observation-6

5.2. The CA has sponsored 180 MISPs for insurance distribution, with a sample of 34 MISPs selected for further scrutiny. Documents related to these MISPs were collected and examined. It was observed that the “Distribution Fee” section in the MISP agreements specifies the mechanism and limits of the fees payable to MISPs. This section is intended to outline the manner of fee payment in accordance with “Section A” of the agreement and comply with MISP guidelines.

5.3. However, in 26 of the examined agreements, “Section A” was left blank, failing to specify the quantum and manner of fee payment. This indicates that these 26 agreements are incomplete.

Submission of the Corporate Agent

5.5. With reference to the 26 MISP agreements, the CA submitted that the distribution fee was communicated through email during 2020, and the emails have been maintained as part of the MISP agreements.

5.6. During personal hearing, the Corporate Agent submitted that applicable distribution fee structure was communicated through written emails to MISPs. These communications formed part of contractual record and no ambiguity or dispute has arisen regarding the fee arrangement.

Issues and concerns

5.7. The Corporate Agent submitted an addendum to the agreement and executed a new agreement on 25 November 2024 with M/s TVS Personal Mobility Solutions, in response to the SCN as part of its corrective measures.

However, these documents still fail to specify the distribution fees, which clearly demonstrates that no effective corrective action has been taken and underscores the Corporate Agent’s weak internal controls.

5.8. The fundamental purpose of entering into any agreement is to explicitly define the scope of work, the agreed payment rates for services rendered, and other essential terms and conditions. This ensures mutual understanding, enforceability, and compliance with regulatory standards. In the absence of a specific mention of payment terms such as distribution fees, the agreement becomes vague and incomplete, rendering it ineffective and defeating its very purpose. This omission not only exposes the Corporate Agent to operational risks and disputes but also indicates a failure to adhere to basic principles of contractual clarity and good governance. Consequently, the Corporate Agent has demonstrated a lack of professional approach in drafting and executing such agreements.

5.9. The CA’s reliance solely on email communication for critical fee agreements raises questions about the adequacy and formal validity of these agreements, especially if the original formal contracts lack explicit fee terms.

5.10. Such informal documentation risks dispute and non-compliance, as emails may not constitute binding contractual amendments, thereby weakening contractual clarity and enforceability.

5.11. Maintaining fee communication separate from the formal MISP agreements raises concerns about governance, control weaknesses, and accountability in sponsor entities responsible for MISP supervision.

5.12. This approach undermines regulatory requirements for transparency, auditability, and maintenance of complete records for at least seven years, complicating effective oversight and compliance verification.

6. Charge-4: Inspection Observation-7

Violations of

6.1. Clause-10(e), 10 (i) and 14(b) & 14 (e) Guidelines on Motor Insurance Service Provider issued by IRDAI vide Ref: IRDNINT / GDL / MISP / 202 / 08 / 2017 dated 31st August 2017.

Inspection observation-7

6.2. It was observed that the CA lacks a specific Standard Operating Procedure (SOP) for the ongoing monitoring of MISP activities. Additionally, it is also observed that the CA did not conduct any monthly audits and reconciliation on a weekly basis to ensure consistent oversight of these MISPs.

6.3. After examining the Annual Audit report of MISP for the Financial year 2022­23, it was observed that 18 MISPs had not shared their respective Bank Account details, thus the Auditor could not verify whether their Bank Account is linked to its PAN in which all payments are received from Insurer(s) or Insurance Intermediary.

6.4. In addition to this, it was also observed that 76 MISPs had no dedicated Bank Account linked to its PAN in which all payments are received from Insurers or Insurance Intermediaries. The details of compliance measures taken, if any, by the MISPs in this regard were not available with the CA.

Submissions of the Corporate Agent

6.5. The CA submitted that their system (DIGI Assure Portal) is integrated across MISP’s and Insurance companies to ensure seamless tracking from policy distribution to premium collection. This system has inbuilt control measures to prevent errors or discrepancies. There are automated features within the system, such as alerts or reminders that notify the MISP of discrepancies or delays, ensuring that issues are resolved promptly.

6.6. The CA stated that they reconcile their premium register on monthly basis with the insurance company and MISP’s which eventually serve as a basis for accountability and reconciliation between all the parties. The invoices are raised post monthly reconciliations only. The distribution fees given to the MISP is done post this activity of ensuring that payments and dues are properly tracked and accounted for.

6.7. During personal hearing, the Corporate Agent submitted that the issues highlighted in the FY 2022-23 internal audit were duly addressed through time bound corrective actions agreed with the auditors. The Company maintains defined timelines for audit responses, formal documentation of corrective actions, audit closure trackers, and structured oversight of audit closures.

6.8. The Corporate Agent submitted an undertaking, post personal hearing, that at the time of MISP on-boarding they take dedicated bank account confirmation from MISP as form of on-boarding documentation. Further post their annual MISP audit, they have further sensitized their MISPs to maintain dedicated PAN linked bank account through training & formal email communication.

6.9. Regarding MISP audit observations, the Corporate Agent submitted that the requisite remediation actions were taken and as part of our internal process same was presented to their Board on 18th September 2024.

Issues and concerns

6.10. The Corporate Agent failed to submit the required internal audit report confirming that issues flagged for 180 MISPs have been properly addressed. Instead, they submitted a mere screenshot of the Board meeting minutes from 18th September 2024, where the matter was merely “placed” before the Board, without any evidence of the Board observation, discussion, or directive on the issue. Such a response is inadequate and raises serious doubts about the integrity of the Corporate Agent.

6.11. The Corporate Agent grossly failed to provide proper premium reconciliation, omitting the mention of cheque realisation dates. It is noted that with concern that on Page-7 of the submitted reconciliation (Entries at S.No. 10-14) reveals the Corporate Agent remitted premiums to the insurer before receiving it from client, which is a blatant violation exposing egregious mismanagement and casts severe doubt on the integrity of their entire reconciliation process.

6.12. Post the personal hearing, the Corporate Agent failed to address the specific issue of weekly reconciliation of insurance premiums for the period mentioned in the inspection observation, despite it being explicitly raised and sought during the hearing. Thus, the Corporate Agent remains non­compliant with clause 10 (i) of MISP Guidelines on Motor Insurance Service Provider issued by IRDAI.

Decisions on Charge-3 and Charge-4

6.13. In view of the above, in exercise of the powers vested under Section-102 of the Insurance Act, 1938, the Authority hereby imposes a penalty of Rs.1 crore (Rupees-One crore) for the violations of Clause-9(1) and 9 (a) of Annexure-2 to be read with Clause-10(n) & 14 (f) and 15 (1), 15 (5b & 5c) and Clause-10 (e), 10 (i) and 14 (b & e) of Guidelines on Motor Insurance Service Provider issued by IRDAI vide Ref: IRDNINT / GDL / MISP / 202 / 08 / 2017 dated 31st August 2017.

7. Charge-5: Inspection Observation-9

Violations of

7.1. Clause-1 and Clause-9 (i) of Code of Conduct to be read with Clause-10 (n) and Clause-14(f) and Clause-10(c), Clause-10(d), Clause-11(k), Clause-11 (I) and Clause-11(m) of Guidelines on Motor Insurance Service Provider issued by IRDAI vide Ref: IRDNINT / GDL / MISP / 202 / 08 / 2017 dated 31st August 2017.

Inspection observation

7.2. It was observed from the proposal forms that no written consent was obtained from prospective clients for issuance of extended warranty policies. The CA submitted that consent was received via OTP, although the proposal form does not provide for this method.

7.3. The CA submitted OTP logs in respect of Policy No.4112 / C / NI-10028141 / 00 / 000, 4112 / C / NI-10028083 / 00 / 000 and 4112 / C / NI-10028086 / 00 / 000. After examining the OTP logs, it was observed that one mobile number linked to two different policies belonged to Nissan, indicating discrepancies.

7.4. The CA claimed policies were emailed to customers but failed to provide any evidence or emails, only sharing customer email IDs.

7.5. There was no conclusive proof that policy documents were shared or that client consent was secured before issuance of extended warranty policies. Consequently, policyholders may be unaware of the existence of these policies and thereby deprived of the benefits and protections available to insured persons.

Submissions of the Corporate Agent

7.6. The CA submitted that in two highlighted cases, policies were issued using the same mobile number because the customer did not receive the OTP SMS, likely due to a technical glitch with the SMS service provider. As a result, the MISP issued the policies using their own contact details after obtaining written consent from the customers.

7.7. The CA also submitted the system logs screenshots where the pdf of Policies was shared with the customer on their email post policy issuance.

7.8. Post personal hearing, the CA submitted an undertaking that they have implemented system validations for mobile OTP during Extended Warranty (EW) issuance. The customer’s mobile number is mandatory, with the system checking format validity and rejecting duplicates via error messages like “You cannot use this number. It has already been used.” Post-validation, an OTP is generated and sent to the number; successful entry and matching against the system-generated OTP are required before proceeding. Explicit customer consent is captured via OTP authentication and digital IT consent logs.

Decision

7.9. The submissions of the Corporate Agent are taken on record and the charge is not pressed.

8. Charge-6: Inspection Obseration-11

Violations of

8.1. Regulation-20 (1), Clause-4(p) and 4 (q) of Schedule-III to be read with Regulations-26(1) and Regulation-30 (iv) of IRDAI (Registration of Corporate Agents) Regulations, 2015.

8.2. Clause-4(b) of Circular No.IRDA / INSP / CIR / ONS / 157 / 09 / 2018 dated 19th September 2018.

Inspection observation-11:

8.3. During inspection, a sample of 14 grievances was drawn from the Corporate Agent’s (CA) register, with full documents requested; however, only partial records for 6 were provided: (1) P0024200002/4111/506104 (mail; missing acknowledgment to customer/insurer and resolution letter); (2) PP000353 01LCS 00 (legal notice; missing acknowledgment and resolution letter, only response to notice submitted); (3) 3311/00903605/000/00 (mail; missing acknowledgment and resolution letter); (4) RDEL378453 (legal notice; missing acknowledgment and resolution letter, only response to notice submitted); (5) NDEL244191 (legal notice; missing acknowledgment and resolution letter, only legal notice submitted with no response); (6) RNAG355581 (legal notice; no documents provided); and (7) 3001/231570015/00/000 (mail; missing acknowledgment and resolution letter, only complaint submitted).

8.4. Since the CA submitted documents for 6 out of the total 14 grievances, it was noted that 4 of these 6 grievances related to one of the insurers were registered only after the customers had issued legal notices.

8.5. Regarding the remaining 8 grievances, it was observed that 6 out of 8 grievances were initially lodged with the insurers and were subsequently shared with the CA. Moreover, there was no evidence that the CA acknowledged receipt of these complaints, forwarded them to the insurers, followed up on their status, or communicated any resolution to the complainants. Consequently, the CA did not provide any documents to the inspection team concerning these 8 grievances, including 2 grievances for which no explanation was offered.

8.6. It was also observed that customer service charter of the CA addresses only loan-related issues, lacking provisions for insurance grievances or clear classification for queries versus complaints. Its grievance management system is designed for loan queries and defaults all insurance complaints as “Enquiry,” impeding proper grievance handling.

8.7. Though the board-approved grievance policy mandates recording, acknowledging, and timely resolving complaints with IRDAI updates, it was not implemented in practice.

Submission of the Corporate Agent

8.8. The CA submitted that 4 out of 14 grievances were related to the legal notices and suitable responses given. Two (02) cases were through email and the same were closed as per the Grievances register.

8.9. The remaining 8 of 14 grievances were direct complaints registered by customers with the Insurance companies and closed by the Insurance companies which were shared later as part of the half yearly return.

8.10. Further Insurance business segment follows the Grievances management as prescribed under Insurance business solicitation policy.

8.11. Post-personal hearing, the Corporate Agent submitted that Grievance Redressal Mechanism is available in their current Board approved Policy of open architecture. The same grievance redressal is already updated on the website. Further, the CA is in process to incorporate the suggested updates regarding the display of grievance/ complaint ID option on the top of the website along with dedicated insurance complaint email ID to be updated both in their policy & website.

Issues and concerns

8.12. The Corporate Agent violated the Customer Service Charter (Version-5) by failing to specify any turn-around-time (TAT) for insurance-related complaints, limiting TAT disclosures to general enquiries alone. This deliberate omission reveals that all customer issues were wrongly logged as mere ‘enquiries,’ which is an act of misclassification driven by negligence. Such conduct demonstrates incompetence, flouts regulatory mandates, and systematically suppresses legitimate grievances, undermining the Charter’s core purpose.

8.13. During the personal hearing, the Corporate Agent’s website exposed inadequate interface offering only a ‘service request’ option, obstructing customers from lodging complaints. This critical defect nullified complaint registration entirely, which was admitted by the Corporate Agent. Their admission shows clear negligence and disregard for the Customer Service Charter. It prevents customers from properly registering their complaints.

8.14. Though the Corporate Agent submitted post-hearing that they are ‘in process’ of implementing corrective measures, they admitted these would take 30 days to complete it, which raises concerns, rather than enabling immediate completion and compliance confirmation.

8.15. Inspection observations make it crystal clear that the customers were compelled to issue legal notices for 4 separate cases due to the Corporate Agent’s website completely lacking any complaint registration option. This denied customers any valid channel for complaint redressal.

8.16. The Corporate Agent’s failure to submit records pertaining to 8 complaints gives rise to grave concerns regarding record maintenance adequacy, indicating regulatory non-compliance.

Decisions

8.17. The Corporate Agent is hereby warned for failing to provide complainants a direct option to register complaints, thereby allowing the agent unilateral discretion to classify issues as mere ‘service requests’ rather than legitimate complaints.

8.18. Further, the Corporate Agent is advised to modify its Customer Service Charter by specifying the necessary TAT related to insurance grievance redressal and by treating issues strictly as complaints in accordance with the defined criteria.

9. Summary of Decisions:

10. The penalty amount of Rs.1 crore (Rupees-One crore) shall be remitted by the Corporate Agent within a period of forty-five days from the date of receipt of this order through NEFT / RTGS (details of which will be communicated separately). An intimation of remittance may be sent to Shri Sanjay Kumar Verma, General Manager (Enforcement & Compliance) at the Insurance Regulatory and Development Authority of India, Survey No. 115/1, Financial District, Nanakramguda, Hyderabad 500032, email id enforcement@irdai.gov.in with a copy to accounts@irdai.gov.in

11. Further,

a) The Order shall be placed before the Board of the Corporate Agent in the upcoming Board Meeting and the Corporate Agent shall provide a copy of the minutes of the discussion.

b) The Corporate Agent shall submit an Action Taken Report to the Authority within 90 days from the date of this Order.

12. If the Corporate Agent 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.