Irdai Faces Questions Over WestBridge’s Dual Insurance Stakes

A whistleblower complaint has put the spotlight on India’s insurance regulator, raising uncomfortable questions about promoter influence in the sector, according to a recent report by CNBC TV18. The allegation centres on WestBridge Capital, an investment firm with deep pockets and an equally deep presence in the insurance market.

The complaint claims WestBridge holds nearly 40 per cent of Star Health and Allied Insurance and close to 60 per cent in Kiwi General Insurance, which recently got the regulator’s initial nod. On the surface, it might look like just another big investor spreading its bets—but here’s the rub: both operate, or plan to operate, in the same business line.

The Insurance Regulatory and Development Authority of India’s (Irdai) own rules, updated in 2022, are fairly explicit. If you hold 25 per cent or more in an insurer, you’re a promoter. And if you’re a promoter, you can’t repeat the act in another company selling the same type of cover. The concern is that WestBridge, knowingly or not, has landed in exactly that restricted territory.

Perhaps more awkward for the regulator is the claim that the potential overlap never made it to the board’s attention when Kiwi’s application was in play. Sources suggest Irdai has already asked its teams to explain how such a key detail slipped past the usual checks.

What Happens Next

For now, the regulator is walking a fine line—fixing the issue without creating instability. One possible fix: persuade WestBridge to trim its Star Health stake so it dips below 25 per cent, shifting from promoter to plain investor. That would neatly remove the formal conflict on paper.

Another route is to let Kiwi proceed, but under conditions—no entry into retail health insurance or any segment where it could directly clash with Star Health. Of course, there’s also the hard stop option: freezing Kiwi’s approval until the shareholding puzzle is solved.

This isn’t just about one firm or one application. Big investment houses often back multiple ventures, and that’s not inherently problematic. The trouble starts when the same guiding hand is in two boardrooms chasing the same customer base. Irdai now finds itself balancing regulatory discipline with market realities. However it decides, this case could become a reference point for years—quietly defining how far promoters can stretch their influence in India’s fast-growing insurance space.