IRDAI action against Pramerica Life for FY 2024-25 EoM limit violation
The Insurance Regulatory and Development Authority of India has issued a formal order against M/s Pramerica Life Insurance Limited for overshooting the prescribed Expenses of Management (EoM) limits for the financial year 2024-25. The Authority has refused to grant any leniency for this breach and has imposed a specific regulatory restriction on the insurer’s ability to expand its business footprint.
This article distills the key aspects of Insurance Regulatory and Development Authority of India Order No. IRDAUF&I/ORD/MISC/112/8/2026 dated 20th August, 2026, and explains its implications for Pramerica Life Insurance Limited and the broader life insurance sector.
Regulatory background and registration status
Pramerica Life Insurance Limited holds Certificate of Registration No. 140, issued on 27th June 2008 by the Insurance Regulatory & Development Authority of India under Section 3 of the Insurance Act, 1938. Under this registration:
- The insurer must comply with:
- The conditions attached to its Certificate of Registration
- The provisions of the Insurance Act, 1938
- The Insurance Regulatory and Development Authority Act, 1999
- All applicable Regulations, Guidelines and Circulars issued by IRDAI from time to time
A key regulatory framework relevant to this case is the IRDAI (Expenses of Management, including Commission, of Insurers) Regulations, 2024 (EoM Regulations, 2024), which lay down ceilings on management expenses for life insurers, including for Non-Participating and Linked products.
Trigger for regulatory scrutiny
The Authority initiated action after reviewing the insurer’s Return on Expenses of Management for FY 2024-25. During this review, IRDAI observed that:
- For the Non-Participating (including Linked policies) segment:
- Permitted EoM limit: Rs. 609.94 crore
- Actual reported expenses: Rs. 747.73 crore
- Excess over limit: Rs. 137.79 crore
In line with the EoM Regulations, 2024, the excess expenditure was already charged by the insurer to its Profit and Loss Account (Shareholders’ Account), as reflected in the Return on Expenses of Management.
However, the quantum of excess and the regulatory requirement to operate within the prescribed limits led the Authority to call for an explanation and consider further regulatory action.
Correspondence and proceedings leading to the order
Initial notice by IRDAI
IRDAI issued a communication bearing reference No. F&I/EoM-Life/FY 2024-25 dated 15th January, 2026 to Pramerica Life Insurance Limited. Through this letter, the Authority:
- Recorded the identified breach of EoM limits for FY 2024-25
- Called upon the insurer to explain why proceedings under Regulation 22 of the
EoM Regulations, 2024should not be initiated - Specifically referred to non-compliance with
Regulation 20(2)in respect of Non-Participating (including Linked) policies
Regulation 20(2) of the EoM Regulations provides:
“In case of Non-participating (including Linked) policies, the Life Insurer shall ensure that its expenses of management are within the allowable limits on an overall basis. Where the Life Insurer has exceeded the limits of expenses of management on overall basis for Non-participating (including Linked) policies, the excess of such expenses shall be charged to Profit & Loss Account. Such allowable limits on an overall basis shall be calculated on the basis of specific limits stipulated in Regulation 8.”
Insurer’s written response and external recommendation
In response: