Go Digit Gets Show Cause Notice From IRDAI For Exceeding Spending Limit

Insurtech company Go Digit received a show cause notice from the Insurance Regulatory and Development Authority of India (IRDAI) for exceeding the regulatory limit for expenses related to the insurance business.

“The company’s expenses relating to the insurance business are in excess of regulatory limits, as specified in IRDAI (Expenses of Management, including commission of insurers) Regulations, 2024, for the 6 months ended September 30, 2024. The forbearance application, as available under the regulations, mode by the company for three year beginning from April 1, 2023 is currently under consideration with IRDAI,” Go Digit said in an exchange filing.

It added that it received a show cause notice from IRDAI on October 18, 2024 on the subject for the financial year 2023-24 and the company is in the process of responding to it.

IRDAI limits expenses of management (EoM) for general insurance at 30% of the gross premium written in the timeframe. For standalone health insurance companies, the limit is 35%.

Go Digit’s total operating expenses in the September quarter of 2024 rose 13.8% to INR 2,136.05 Cr from INR 1,876.54 Cr in Q2 FY24. Its gross written premium (GWP) increased 14.2% to INR 2,368.57 Cr in Q2 FY25 from INR 2,073.84 Cr in the year-ago quarter. 

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