Canara HSBC Life sold an 88-year-old a policy capped at age 80 — IRDAI fined it ₹1 crore

In February 2025, Canara Bank, acting as corporate agent for Canara HSBC Life Insurance, sold a deferred annuity policy to an 88-year-old man, naming his 57-year-old daughter as annuitant. The product's approved terms allowed entry only between ages 30 and 80. The annual premium was ₹2 lakh, payable over four years — a significant commitment the sale process never properly tested.

IRDAI opened a case on its own motion after a social media post flagged the sale. Its examination found the suitability and financial assessments were never carried out despite the customer's advanced age, the verification call and proposal form were deficient, the benefit illustration carried no verifiable acknowledgement, the customer information sheet never reached the buyer at point of sale, premium was collected before the policy was even issued, and the consequences of the proposer dying during the premium-paying term were never adequately explained.

The regulator ruled that these failures breached the IRDAI (Protection of Policyholders' Interests) Regulations 2024, the corporate governance regulations and its Master Circular on policyholder protection — and constituted mis-selling. It fined the insurer ₹1 crore. The company had already refunded the full ₹4.09 lakh and reversed the agent's commission, but the penalty stands as the price of a distribution machine that sold outside its own product's rules — and needed a stranger's post to notice.

₹1 crore penalty; ₹4.09 lakh premium refunded with commission reversed; IRDAI-ordered audit of all policies sold to over-75s through Canara Bank

The policy was sold eight years beyond its own approved entry-age cap — a rule the insurer's own quotation and issuance systems should have blocked automatically.

No suitability or financial assessment was done despite extreme age and a sizeable premium; core disclosure documents never reached the customer at the point of sale.

Canara Bank's branch-level sales ran ahead of the insurer's verification framework, and none of the insurer's internal controls caught the breach before an outsider's social media post did.

Premium was collected before policy issuance, and the consequences of the proposer's death during the paying term were never explained.

Distribution reach without suitability controls is a fine waiting to happen — when agents earn on placement, the insurer must enforce entry-age and verification rules itself.

Canara HSBC Life met the policyholder and, at his request, refunded the entire ₹4.09 lakh including the second-year premium, and reversed the commission. It revised the product brochure, policy document and suitability assessment framework, and introduced pre-issuance video-based verification calls. IRDAI additionally ordered a comprehensive audit of every policy sold to proposers over 75 through Canara Bank, a strengthened oversight framework for corporate agents, and full implementation of the Bima-ASBA facility across all distribution channels. The order was reported on 11 September 2026.