The Insurance Regulatory and Development Authority of India (IRDAI) has imposed a ₹1 crore penalty on Care Health Insurance Ltd after a remote inspection revealed major lapses in health insurance claim settlement, transparency, grievance redressal and financial reporting practices. The penalty must be paid from the company’s shareholders’ account within 45 days and presented to its board, and an action‑taken report is due within 90 days.
IRDAI’s 15 December 2025 order found multiple deficiencies in cashless claim handling, including missing patient or attendant signatures on discharge summaries and summary bills, reductions in claim amounts through hospital discounts and tariff differences not reflected in final bills, and policyholders being unaware of actual hospital bills.
Settlements were often communicated primarily to hospitals rather than insured customers, and detailed claim settlement letters showing deductions and reasons for short payments were not sent.
On grievance redressal, IRDAI found that Care Health did not consistently inform policyholders of their right to approach the Insurance Ombudsman or provide the relevant ombudsman’s name and address, with closure and repudiation letters typically containing only customer care contact details, an email ID and a generic hyperlink.
The inspection also uncovered delays in addressing serious cybersecurity weaknesses beyond IRDAI‑prescribed timelines, and noted accounting practices related to reinsurance that made profits and financial strength appear better than actual. IRDAI observed that ₹1.06 crore received as proposal deposits had been held in an unallocated premium account for more than six months without transfer to the unclaimed amounts account, which it characterised as unethical and contrary to policyholder protection norms.
Care Health informed IRDAI that it shared ombudsman details via a hyperlink because the information was “variable in nature” and has since updated processes to include specific ombudsman details in all grievance resolution and claim rejection letters. On cashless claims, the insurer said customers were copied on emails sent to hospitals, that discounts were passed on to policyholders and that digitisation is underway to improve transparency, while noting some network hospitals could not reflect discounts due to multiple tariff structures and IT constraints.
After weighing submissions, IRDAI imposed the monetary penalty specifically for serious lapses in claim settlement and communication, issued warnings and advisories on other findings, and cautioned that repeat violations would invite stronger regulatory action.
The order underscores that clear, timely and detailed communication on claims and grievance rights is mandatory and that remedial steps taken later do not erase violations that have already affected policyholders.
