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

Business Recorder reported that India's insurance regulator has barred Niva Bupa Health Insurance from setting up new outlets for six months because the company breached limits on business expenses. The health insurer confirmed the restriction on Thursday, saying the breach concerned fiscal 2024-25, when it did not stay within limits on management expenses, which include operating costs and commissions paid to agents and distributors. The company, which is backed by the UK-based healthcare group Bupa, added that it complied with the expense rules for fiscal 2025-26 and expects to remain compliant in the current year. Following the announcement, Niva Bupa's shares deepened their losses and closed 1.3% lower.

The move follows a period of fiercer rivalry in India's insurance market, which has lifted distribution costs as intermediary payouts climb across the sector. Business Recorder also noted an earlier Reuters report that the Insurance Regulatory and Development Authority of India is seeking to change how distributors are paid, in order to curb mis-selling and reduce high distribution costs. Health insurers are supposed to keep expenses within 35% of their gross written premiums each financial year.