MoneyFinx | Finance & Policy News | Updated: November 2025
The Insurance Regulatory and Development Authority of India (IRDAI) has issued a formal warning to Reliance Nippon Life Insurance Company Ltd. after finding multiple governance lapses during a thematic remote inspection. The order, dated 25 November 2025, highlights procedural violations linked to auditor remuneration, claim repudiation reviews, and management of unclaimed policyholder amounts.
IRDAI conducted a remote inspection between 10–13 January 2022. The Authority later issued a Show Cause Notice (SCN) in November 2024 after spotting inconsistencies related to the Insurance Act, 1938 and corporate governance guidelines. Reliance Nippon Life submitted its replies in December 2024 and again in February 2025 during the personal hearing
Key Governance Lapses Identified
Improper Approval of Auditor Remuneration
IRDAI observed that the Audit Committee and the Board did not directly approve the remuneration for joint statutory auditors. Instead, the Executive Director, CEO, and CFO were authorised to finalise the payments—something the regulator considered a conflict of interest, as management should not set auditor pay.
रिलायंस निप्पन लाइफ इंश्योरेंस …
The insurer informed IRDAI that corrective action was taken from 2022 onwards.
Regulator’s decision:
✔ Warning issued
✔ Direction to strictly follow the 2024 Corporate Governance Master Circular
✔ Repeat violations will attract stricter action
रिलायंस निप्पन लाइफ इंश्योरेंस …
Inadequate Review of Policyholder Protection Matters
The second and more serious observation concerns the Policyholders Protection Committee (PPC).
IRDAI found that:
The Committee did not review repudiated claims as required.
Issues like high levels of unclaimed amounts and surrender payouts were not properly highlighted to the PPC.
A page relating to claim repudiation appeared to have been added later when agenda documents were re-submitted during inspection, raising concerns over transparency.
रिलायंस निप्पन लाइफ इंश्योरेंस …
During the hearing, Reliance Nippon Life argued that PPC and Board members were regularly updated on unclaimed amounts, surrenders, and claim-related data. However, IRDAI said the insurer provided only selective minutes and that key details were “placed for noting” instead of being “reviewed,” which violates governance norms.
IRDAI has ordered Reliance Nippon Life Insurance to:
Place the order before its Board in the upcoming meeting
Submit an Action Taken Report within 90 days
Review all procedural gaps to ensure full compliance in future inspections
रिलायंस निप्पन लाइफ इंश्योरेंस …
The insurer also has the right to appeal before the Securities Appellate Tribunal (SAT) under Section 110 of the Insurance Act, 1938.
Why This Matters for Policyholders and the Insurance Sector
This action reinforces IRDAI’s focus on:
Transparency in the treatment of policyholders
Strong oversight by insurer Boards
Stricter compliance with governance rules
Minimising unclaimed funds and ensuring fair claim settlements
For customers, it is a reminder that regulators are actively monitoring insurers to ensure fairness, accountability, and timely payouts.