India bars Niva Bupa from opening branches for six months due to expense breach (updated)
UPDATE 1-India bars Niva Bupa from opening branches for six months due to expense breach Adds details throughout
Aug 20 (Reuters) - India's insurance regulator has barred Niva Bupa Health Insurance NIVA.NS from opening new places of business for six months because of the breach of business expense limits, the health insurer said on Thursday.
The insurer failed to comply with limits on expenses of management, which comprises operating costs and commissions paid to agents and distributors, during fiscal year 2024-25, as per the statement.
Niva Bupa, backed by UK-based international healthcare group Bupa BUPAI.UL, said it complied with the expense rules for fiscal 2025-26 and was on track to remain compliant in the current fiscal.
Intensifying competition in India's insurance sector has pushed up distribution costs, with commissions rising across the industry. IRDAI is seeking to reform how distributors are paid in an effort to curb mis-selling of policies and reduce high distribution costs in one of the world's fastest-growing insurance markets, Reuters reported last month.
Expenses for health insurers should not exceed 35% of gross written premiums in a financial year.
Shares of Niva Bupa extended losses to close 1.3% lower after the announcement.
(Reporting by Kashish Tandon and Nishit Navin in Bengaluru; Editing by Mrigank Dhaniwala)
((Kashish.Tandon@thomsonreuters.com; 8800437922;))
Recent news on Niva Bupa Health Insurance
See all newsJefferies sees India's proposed insurance registry cutting fraud, claims costs
India bars Niva Bupa from opening branches for six months due to expense breach (updated)
Brief: Niva Bupa Health Insurance Says IRDAI Directed Co Not To Open New Place Of Business For Six Months
India regulator bars Niva Bupa from opening branches for six months
RCS - Brit Utd ProvAscBUPA - Bupa Half-yearly Financial Report