IRDAI fined Marsh India ₹1 crore for sitting on client premiums

India's insurance regulator IRDAI penalized Marsh India Insurance Brokers Pvt Ltd with a ₹1 crore fine for violations of the Insurance Act, 1938 and related regulations: the broker held premiums received from clients in an insurance bank account for more than 15 days and failed to remit them to insurers or reinsurers within the time limit, India News Online reported in October 2024.

Between financial years 2018-19 and 2020-21, Marsh India missed the remittance deadline in 826 cases involving ₹12,53,41,45,627 — and in some cases the delay exceeded 900 days. Regulations require brokers to promptly remit premiums and claims, and any delay must be reported to the insurer with written consent obtained.

IRDAI ordered a review of all pending remittances with an action-taken report on the status as of September 30, 2024 within 90 days, plus a review of internal controls to fix process deficiencies. Marsh's defense — that insurers were reluctant to sign Terms of Business Agreements explicitly, so implied consent applied — did not stop the penalty.

₹1 crore fine, plus orders to review all pending remittances and file an action-taken report within 90 days; 826 delayed cases involved ₹1,253 crore of premiums.

Broker regulations cap premium remittance at fifteen days, and hundreds of payments blew past it.

Delays stretching beyond 900 days suggested systemic process failure rather than one-off slips.

Marsh's deemed-consent argument did not satisfy the requirement for written consent to delays.

Holding other people's money is a compliance clock, not a treasury float: the longer premiums sit, the more a routine process failure looks like misuse.

As of the October 2024 order, Marsh India had 90 days to review internal controls, remediate deficiencies and file an action-taken report covering all pending remittances.