NEW DELHI– July 12, 2025 – India’s insurance regulator, the Insurance Regulatory and Development Authority of India (IRDAI), has issued show-cause notices to eight prominent insurance companies following the discovery of irregularities in the processing and settlement of claims. The companies that received the notices include Niva Bupa, Star Health, Care Health, ManipalCigna, New India Assurance, Tata AIG, ICICI Lombard, and HDFC ERGO. The news was first reported by CNBC-TV18, although the IRDAI has not yet officially commented on the matter.
Alleged Irregularities.
The alleged irregularities stem from the violation of several provisions outlined in the Health Insurance Master Circular issued by IRDAI in 2024. This circular established specific guidelines regarding claim processing timelines, cashless approval procedures, and the information to be communicated to policyholders.
However, the regulator’s findings suggest that widespread practices continue, including:
- Unauthorized reductions in medical claim amounts.
- Rejection of claims without proper justification.
- Failure to approve claims within specified timelines.
A recent inspection conducted last month reportedly uncovered serious irregularities in the processing of health insurance claims.
Potential Action by IRDAI
It is anticipated that the matter of the show-cause notices to these insurance companies will be discussed in the upcoming IRDAI meeting next week. If the insurance companies’ responses are deemed unsatisfactory, the IRDAI is reportedly prepared to take action. Reports suggest that the authority could impose penalties and even order companies to refund money to affected policyholders, potentially with interest. This development is particularly noteworthy as it comes amidst a central government plan to bring the health insurance claim portal under the purview of both the Ministry of Finance and the IRDAI, aiming to curb exploitation in the sector.
Companies Respond: “Routine Procedure”.
Meanwhile, New India Assurance and ICICI Lombard have confirmed receiving the IRDAI notices. However, both companies have characterized the notices as part of a “routine procedure.” They stated that steps have been taken to expedite medical claim approvals without causing any grievances. The other companies involved have not yet commented on the matter.
