IRDAI Issues Show-Cause Notice to Go Digit Insurance Over Exceeding Expense Limits
Go Digit General Insurance received a show-cause notice from IRDAI for exceeding expense limits for six months ending September 2024. The insurer, currently seeking forbearance under IRDAI’s Expenses of Management regulations, is in the process of responding to the notice, which pertains to its fiscal 2023-24 spending.
IRDAI Issues Show-Cause Notice to Go Digit Insurance Over Exceeding Expense Limits
Go Digit General Insurance has received a show-cause notice from the Insurance Regulatory and Development Authority of India (IRDAI) for surpassing regulatory limits on expenses for the six months ending September 2024. The insurer reported that its expenses tied to business operations exceeded the guidelines established under IRDAI’s Expenses of Management (EOM) Regulations, 2024, prompting regulatory scrutiny.
In a statement accompanying its Q2FY25 results, Go Digit confirmed the notice issuance and clarified that it has applied for forbearance—a temporary waiver allowed under the EOM regulations—for three years starting from April 1, 2023. The IRDAI is currently reviewing this application, as Go Digit prepares a response to the show-cause notice, which pertains to the fiscal year 2023-24 and was issued on October 18, 2024.
In January, IRDAI combined commission-related rules with EOM regulations to form a single comprehensive framework for both life and general insurers, intended to enforce fiscal discipline and protect policyholders’ interests. Under these new regulations, general insurers are limited to capping initial commissions at 30% of total expenditures for agents or intermediaries.
Go Digit’s financial performance for the September quarter, as measured by its combined ratio, reached 112.2%, reflecting the insurer’s expenditure of ₹112 for every ₹100 earned in premiums—indicating expenses and claims continue to exceed premium income.
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