India bars Niva Bupa from opening branches for six months due to expense breach

India's insurance regulator, the IRDAI, has indefinitely barred Niva Bupa Health Insurance from opening new branches due to an overspend in management expenses during fiscal year 2024-25. The health insurer failed to meet the 35% limit on expenses, which includes operational costs and commissions paid to agents and distributors, according to the statement.

Niva Bupa, which is backed by the UK-based international healthcare group Bupa, stated that it complied with the expense rules for fiscal year 2025-26 and is on track to remain compliant in the current fiscal year. Insurance reforms in India aim to control healthcare costs, and intense competition in the insurance sector has led to rising distribution costs, with commissions increasing across the industry.

The IRDAI is working on reforms to change how distributors are paid in an effort to reduce mis-selling of policies and lower high distribution costs in one of the world's fastest-growing insurance markets. As a result of the announcement, Niva Bupa shares dropped 1.3% in value.