Why IRDAI Penalised Canara HSBC Life Insurance INR 1 Crore for Selling Policy to 88-Year-Old
IRDAI penalised Canara HSBC Life Insurance INR 1 crore for mis-selling a policy to an 88-year-old senior citizen, citing severe compliance lapses, age limit violations, and inadequate suitability assessments. Following regulatory intervention, Canara HSBC Life refunded the full premium of INR 4.09 lakh and reversed associated sales commissions
The Insurance Regulatory and Development Authority of India (IRDAI) has penalised Canara HSBC Life Insurance Company Limited INR 1 crore for mis-selling a deferred annuity policy to an 88-year-old senior citizen, highlighting systemic failures in product suitability, disclosure, and internal governance.
Regulatory Scrutiny and Policy Violations
The penalty follows the regulator's suo motu cognisance of a social media post detailing the policy sale, reports Money Control. Distributed through the insurer's corporate agent, Canara Bank, the policy carried an annual premium of INR 2 lakh across a four-year term, designating the customer's daughter as the annuitant. IRDAI Warns Public Against Fraudulent Website 'igmsirdai.online' Impersonating Grievance Portal.
Upon investigation, IRDAI discovered that the approved product guidelines restricted entry to individuals aged 30 to 80, directly violating the terms by enrolling an 88-year-old proposer. The regulator noted an absence of proper financial and suitability assessments, alongside numerous procedural deficiencies during verification calls, proposal filings, and disclosures.
Corrective Actions and Insurer Response
Following regulatory intervention, Canara HSBC Life refunded the full premium of INR 4.09 lakh - covering two paid years - and reversed associated sales commissions. The insurer has since updated its product documentation and suitability frameworks, while instituting pre-issuance video validation calls. Niva Bupa Faces IRDAI Action, Barred From Opening New Places Of Business For 6 Months, Know Why.
Beyond the financial penalty issued under Section 102 of the Insurance Act, 1938, IRDAI ordered a comprehensive internal audit of all policies sold to customers over the age of 75 through Canara Bank. The directive also mandates heightened oversight of corporate partners and the deployment of the Bima-ASBA facility across all distribution channels.
(The above story first appeared on LatestLY on Sep 11, 2026 02:30 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).
