The Insurance Regulatory and Development Authority of India (IRDAI) imposed a penalty of Rs 2 crore on HDFC Life Insurance. Which of the following reasons were mentioned as the basis for the penalty? (August 2024)
1. Issues related to the protection of policyholders' interests
2. Irregularities concerning the outsourcing of services
3. Misreporting of financial statements
4. Violations in reinsurance practices

Correct option is A

The penalty was imposed on HDFC Life primarily for issues related to the protection of policyholders' interests and irregularities in the outsourcing of services.
· Protection of Policyholders' Interests:
· Penalty of Rs 1 crore was imposed for violations concerning policyholders' rights.
· Outsourcing of Services:
· Another penalty of Rs 1 crore was levied for irregularities in outsourcing activities.
· Inspection Details:
· The violations were identified during an onsite inspection conducted by IRDAI in September 2020, covering the financial years 2017-18, 2018-19, and 2019-20.
· Order Date:
· The IRDAI issued the penalty order on August 01, 2024.