Why Policybazaar Slapped with 5 Crore Fine? Here is Everything To Know
Policybazaar Insurance Brokers Pvt Ltd has been fined Rs 5 crore by the Insurance Regulatory and Development Authority of India (IRDAI) for breaking several clauses in the 1938 Insurance Act and the 2017 IRDAI (Insurance Web Aggregators) Regulations. Additionally, the regulator has cautioned, advised, and directed the business.
IRDAI's formal order dated August 4, 2025, states that the offenses cover 11 different accusations, ranging from unlawful product advertising practices to governance failings. The violations took place prior to Policybazaar obtaining a composite broker license in February 2024, when it was operating as an Insurance Web Aggregator (IWA).
The Policybazaar platform's display of product rankings without providing enough information to help potential customers make educated decisions was one of the major violations mentioned. The IRDAI found that the platform advertised several insurance products as "top" or "best" in a biased and unsupported manner.
The IRDAI found that Bajaj Allianz Goal Assure, Edelweiss Tokyo Wealth Gain+, HDFC Click2Wealth, SBI Life e-Wealth Insurance, and ICICI Signature were the top five ULIP products advertised on the internet during its June 1–5, 2020, inspection. The regulator noted the lack of clear standards or disclaimers underlying the ranking's display.
The decision also highlights infractions of governance, such as key managerial personnel (KMPs) holding directorships in other firms without previous IRDAI permission. The regulator also fined Policybazaar Rs 1 crore for its failure to timely pay insurance premiums to the appropriate insurers.
The inspection revealed that Policybazaar took at least three working days to transfer premium payments via its proprietary payment gateway and nodal account. This practice violates Section 64VB of the Insurance Act, which requires intermediaries to transfer premiums to insurers within 24 hours of receiving them.
The parent company of Policybazaar, PB Fintech Ltd, confirmed the regulatory action in a stock exchange statement and stated that the issue would be brought up with the board of directors at its next meeting. The company stated that an action taken report would be sent to the regulator. "The Authority has levied a penalty of Rs 5 crore, via its Order dated August 4, 2025, on Policybazaar, a wholly owned subsidiary of PB Fintech Limited."
