Shares of Star Health and Allied Insurance Company plummeted to a fresh 52-week low on Tuesday, March 25, following revelations of serious lapses in the company’s claims settlement practices by the Insurance Regulatory and Development Authority of India (IRDAI), according to sources.

A recent inspection by IRDAI into Star Health’s claims settlement processes uncovered significant irregularities, as reported by CNBC-TV18. The regulatory body is expected to take action against the insurer once the investigation concludes.

Star Health has issued a clarification, saying, “We would like to highlight that IRDAI conducts regular audits and thematic inspections as part of its regulatory oversight, in line with the framework outlined in its master circulars. These assessments are a routine process to ensure compliance across the industry. The media statement appeared to be speculative and motivated in nature, and we have not received any communication on this subject from the regulator.”

Star Health clarified that IRDAI routinely conducts audits and thematic inspections as part of its regulatory oversight in accordance with its master circulars. The company said that these assessments are standard procedures to ensure compliance across the industry.

#CNBCTV18Exclusive | #IRDAI finds serious lapses in claims settlement practices of #StarHealthInsurance, likely to take action against co once investigations conclude

IRDAI recently concluded inspection of Star Health with respect to claims settlement practises pic.twitter.com/lf48RG3whp

— CNBC-TV18 (@CNBCTV18Live) March 25, 2025

The stock fell 3.82% to an intraday low of ₹345.3 per share on the NSE, its lowest level in a year. This marked the second consecutive session of losses, with the stock shedding 4.27% during this period.

Sources also noted that IRDAI had conducted inspections at 8-10 general and health insurance companies, examining key aspects such as claims repudiation, approvals, queries raised, and deductions. CNBC-TV18 has reached out to Star Health for a response, but is yet to receive a reply.

Also Read: Star Health Data Leak: Shares fall after cyberattack, forensic investigation underway

Previously, the Chennai-based insurer faced scrutiny following a cyberattack that compromised the sensitive data of over 31 million customers.

Stolen information, including names, PAN details, medical records, and policy documents, was reportedly being sold online for as much as $150,000, with smaller datasets priced at $10,000.

Also Read: Star Health Insurance breach: How to safeguard your data and rights as a policyholder