Irdai fines ICICI Lombard Rs 1 crore for outsourcing, vendor management lapses

Reuters Irdai has fined ICICI Lombard ₹1 crore for failing to properly classify and report outsourced event management activities involving agents of other insurers during its 2019 inspection. (File photo) Mumbai: The Insurance Regulatory and Development Authority of India (Irdai) has imposed a ₹1 crore penalty on ICICI Lombard General Insurance for lapses in outsourcing practices, vendor management and corporate governance during an inspection conducted in 2019.The penalty relates to payments made by the insurer under the head 'sales marketing and business support.' During FY19, ICICI Lombard had incurred ₹709.57 crore under this head, of which the insurer said that about ₹35-37 crore was paid to individual agents of other insurers. Irdai said the insurer used agents of other insurers for event management activities, without adequate supporting documents, and failed to classify the activities as outsourced or report them in outsourcing returns. "By not classifying event management services as outsourced activity, the insurer failed to report these expenses in the Outsourcing Returns thereby avoiding regulatory scrutiny in time," IRDAI said in its September 7 order.