The Insurance Regulatory and Development Authority of India (Irdai) has put a penalty on Flipkart Internet Private Limited (FIPL) for flouting some key insurance regulatory norms.
The Irdai, in an order dated April 7, 2025, imposed a fine of Rs 1.06 crore on FIPL for two misconducts:
- Violating insurance distribution norms
- Misusing its digital insurance platform to redirect users to another intermediary
Following a detailed investigation into Flipkart’s insurance activities, the regulator found that FIPL had redirected prospective insurance buyers from its approved Insurance Self-Network Platform (ISNP) to a third-party intermediary's website.
The insurance regulatory body considers such actions an “unauthorised method of insurance solicitation.”
How was Flipkart redirecting Insurance Buyers?
The e-commerce platform had obtained its ISNP approval from Irdai to directly sell insurance products online by integrating with insurance companies. However, upon investigation Irdai found that when users clicked the ‘Buy Insurance’ button on Flipkart’s ISNP site, they were getting redirected to a different intermediary website.
The insurance transactions were being completed on the intermediary's website which is a violation of Clause 15.1(b) of the Insurance E-commerce Guidelines, 2017. This Clause allows ISNP-certified platforms to integrate only with insurers, not other intermediaries.
In its defence, the e-commerce platform claimed it merely provided advertising space to the intermediary and had no formal referral arrangements with these websites.
But Irdai disagrees, maintaining that the absence of any visible advertising banners and the clear ‘redirection’ of insurance buyers via such a key function does not qualify as an ‘ad placement’.
Irdai also found some mismatches between the ads agreement and invoices shown by Flipkart.
The order noted, that some of these were dated after the agreement had expired, raising further doubts about the true nature of the relationship claimed by Flipkart.
Selling Insurance Without Valid Registration
In a separate violation listed in its order, Irdai has also reprimanded Flipkart for continuing to sell insurance policies for nearly a week after its Certificate of Registration (CoR) as a corporate agent had already expired on September 25, 2024.
As per the order, it reportedly sold around 400 motor insurance policies between September 26 and October 1, 2024.
Flipkart reasoned that it believed it could continue the operation since the renewal application was under process. But Irdai clarified its stance that the filing of a renewal does not automatically extend a licence unless explicitly communicated by the regulator. The e-commerce platform was fined for this lapse as well.
There Irdai has imposed the following penalty on Flipkart:
For Violation of Clause 15.1(b) of Insurance E-commerce Guidelines, 2017 = Penalty of Rs. 1 Crore
For Violation of Clause 3(ii)(a) of Schedule III read with Regulation 26 of IRDAI (Registration of Corporate Agents) Regulations, 2015 = Penalty of Rs 6 lakh.
Additionally, the insurance regulator also raised its concern regarding the volume of policies Flipkart sold, which is over 70,000 in one year, while having just one ‘Specified Person’ authorised to handle insurance sales.
As per laws, this was a breach of Regulation 14(v) of the IRDAI (Registration of Corporate Agents) Regulations, 2015. This regulation mandates adequate human resources required for effective policy solicitation and servicing.
Though Flipkart reasoned that its model was majorly tech-driven reducing the need for human intervention, it did acknowledge the issue and confirmed that it had begun onboarding more trained professionals.
Irdai only issued a warning for this violation without imposing a monetary penalty on the same.
"Flipkart operates with a strong commitment to regulatory compliance and the highest standards of governance. We are currently evaluating the contents of the order," the e-commerce platform has stated following Irdai's order.
