“The company’s expenses related to the insurance business are above the limits set by IRDAI (Expenses of Management, including Commission of Insurers) Regulations, 2024, for the six months ended September 30, 2024,” Go Digit stated in the notes accompanying its Q2FY25 financial results.
Go Digit General Insurance on Thursday reported that it has received a show cause notice from the Insurance Regulatory and Development Authority of India (IRDAI) after its expenses for the six months ending September 2024 exceeded regulatory limits.
“The company’s expenses related to the insurance business are above the limits set by IRDAI (Expenses of Management, including Commission of Insurers) Regulations, 2024, for the six months ended September 30, 2024,” Go Digit stated in the notes accompanying its Q2FY25 financial results. The insurer added that it has applied for forbearance, as permitted under the regulations, for three years beginning April 1, 2023. The application is currently under review by IRDAI.
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“On this subject the company has received show cause notice from IRDAI for Financial year 2023-24 dated October 18, 2024 and the company is in the process of responding to the same,” it said. In January, the insurance regulator merged commission-related regulations with the Expenses of Management (EOM) rules for life and general insurers, creating a single comprehensive framework. The new regulations cap the spending on business operations, including commissions and other management costs, to ensure financial discipline and safeguard policyholders’ interests. For instance, general insurers are allowed to offer only 30% of their first-year commission as EOM or as payments to agents/intermediaries.
Go Digit’s combined ratio for the September quarter stood at 112.2%, meaning the company spent ₹112 on losses and expenses for every ₹100 earned in premium.
