IRDAI Care Health Insurance ESOP order stayed by SAT, appeal pending

What the Record Shows

The Insurance Regulatory and Development Authority of India (IRDAI) passed an order dated 23 July 2024, referenced IRDAI/F&I/ORD/MISC/106/7/2024, in the matter of Care Health Insurance Limited, imposing a penalty of Rs 1 crore and directing the insurer to unwind employee stock options (ESOPs) that had been granted to its non-executive chairperson. That order does not stand as a concluded finding: the Securities Appellate Tribunal (SAT) stayed it in August 2024, and the appeal remains pending. As of the most recent tribunal record reviewed for this report, an order dated 30 March 2026 in Appeal No. 04 of 2024, the matter was "part heard" and listed for further hearing in June 2026, with no final judgment delivered.

Per the IRDAI order, the insurer was directed to buy back 75,69,685 exercised shares at Rs 45.32 per share within 30 days, to cancel all unexercised and unvested options within 15 days, and to obtain the Authority's prior approval for future decisions on director remuneration. The options at issue were part of a larger grant of 2,27,11,327 options, an ESOP pool reported to be worth several hundred crore.

IRDAI's case, as recorded, was that the grant to a non-executive chairperson was made despite the Authority's express rejection dated 10 May 2022, which it held to be contrary to Section 48A of the Insurance Act, 1938, read with the IRDAI (Remuneration of Non-Executive Directors of Private Sector Insurers) Guidelines, 2016. The company's position, also on the record, was that the options were linked to the chairperson's role at the parent group, Religare Enterprises Limited, a characterisation IRDAI did not accept. Because the order is stayed and under challenge, nothing in it has been established as final.

How It Worked

The dispute turns on a rule specific to insurers. Under the framework IRDAI cited, remuneration to non-executive directors of private-sector insurers is regulated, and the grant of stock options to a non-executive chairperson is not a matter left to the company alone. Per the order dated 23 July 2024, the Authority had considered and rejected a proposal in May 2022, and it treated the subsequent grant as having proceeded without the approval the framework requires.

The named individual is Dr Rashmi Saluja, described in the proceedings as the non-executive chairperson of Care Health Insurance and the recipient of the options in question. She is the appellant before SAT. In keeping with the record, this report describes only the ESOP grant and the regulator's objection to it; it does not attribute any wrongdoing to her, and it notes that she has contested the order through the appeal now pending before the tribunal.

The order's operative directions were structured as an unwinding: a buy-back of the shares already exercised, cancellation of options not yet exercised or vested, and a forward-looking control requiring IRDAI's prior sign-off on director-pay decisions, alongside the monetary penalty. IRDAI framed these as measures to bring the insurer's remuneration practices back within the statutory perimeter.

Care Health Insurance and the chairperson challenged the order before SAT. In August 2024 the tribunal stayed the order while, per the proceedings, restraining the exercise of pending options and any dilution until the appeal is finally decided. The appeal has since moved through a series of hearings, the latest recorded being the part-heard order of 30 March 2026. No part of the IRDAI order has taken effect while the stay is in force.

Who Lost Money

This is a governance and regulatory-compliance matter, not a scheme in which policyholders or investors lost deposits. No customer of the insurer is recorded as having suffered a loss, and none should be inferred. The concern IRDAI articulated is that remuneration practices at a licensed insurer must stay within the caps and approval requirements set for the sector, because an insurer's governance sits on top of policyholder funds.

The quantum in dispute is the value of the ESOP pool, reported in coverage of the matter to run to roughly Rs 480 crore across the full grant, with the exercised tranche the subject of the buy-back direction. That figure is the value at stake in the dispute, not a loss that has been established; the order that would have required its unwinding is stayed and unimplemented.

Because the order has not taken effect, the buy-back has not occurred, the options have not been cancelled, and the Rs 1 crore penalty has not been collected. Any consequence for the insurer, its shareholders or the chairperson depends entirely on how the pending appeal is decided.

Where It Stands Now

The current position, verified against the tribunal's own record, is that the IRDAI order of 23 July 2024 is stayed and the appeal is undecided. The most recent order located, dated 30 March 2026 in Appeal No. 04 of 2024, records the matter as part heard, directs a reply to an intervening application, and lists the appeal for hearing in June 2026. No final judgment allowing or dismissing the appeal could be located on the tribunal's or the regulator's records as of 30 July 2026, when this report was reviewed; the position may change once SAT delivers its final decision.

Readers should treat the July 2024 order strictly as a stayed regulatory order under active challenge, not as a finding that has survived appeal. Separately, IRDAI passed an unrelated order against Care Health Insurance on 15 December 2025 concerning claims-settlement and disclosure practices arising from a 2021 inspection; that is a distinct matter and is not the subject of this report.

What It Means

The case is a live test of how far an insurance regulator's remit reaches into a company's compensation decisions, and of the difference between an order being passed and an order taking effect. For readers, the most useful takeaway is procedural rather than dramatic: a regulatory order that is stayed on appeal is not an established finding, and reporting it as one would misstate the record. The presumption in the appellant's favour has not been displaced, precisely because the tribunal has yet to rule.

The matter also illustrates why sector-specific approval rules exist. Insurers are custodians of long-dated policyholder obligations, so their remuneration and governance are supervised more tightly than at an ordinary company. Anyone wanting to understand a licensed insurer's standing can verify its registration and view regulatory actions through IRDAI's public registers and the Bima Bharosa portal. The same habit of separating a headline number from a settled outcome applies when weighing any long-term financial commitment, which is the kind of net-versus-gross thinking a simple investment calculator is built for.

This matter sits alongside other recent regulatory actions on intermediary and insurer conduct, such as the IRDAI penalty on Policybazaar over product ranking and premium remittance, and the broader run of investor-protection notices including SEBI's advisory on fake trading apps. The full set is tracked in the Oquilia enforcement archive.

FAQ

Is this a final finding against Care Health Insurance or its chairperson?

No. The IRDAI order dated 23 July 2024 was stayed by the Securities Appellate Tribunal in August 2024 and remains under appeal. As of the latest record reviewed, dated 30 March 2026, the matter was part heard with no final judgment. Nothing in the order has been established as a concluded finding, and the presumption in the appellant's favour has not been displaced.

What did IRDAI object to?

Per the order, IRDAI objected to the grant of employee stock options to a non-executive chairperson, which it held required the Authority's prior approval under Section 48A of the Insurance Act, 1938 and the 2016 guidelines on non-executive director remuneration. IRDAI recorded that it had earlier rejected a related proposal in May 2022.

What did the order direct?

Per the order, Care Health Insurance was to pay a Rs 1 crore penalty, buy back 75,69,685 exercised shares at Rs 45.32 per share within 30 days, cancel all unexercised and unvested options within 15 days, and seek IRDAI's prior approval for future director-remuneration decisions. These directions are stayed and have not been implemented.

Has the penalty been paid or the shares bought back?

No. Because the Securities Appellate Tribunal stayed the order, its directions have not taken effect. The penalty has not been collected, the buy-back has not happened, and the options have not been cancelled while the appeal is pending.

Where can I read the official record?

The current status is documented in the Securities Appellate Tribunal's proceedings in the appeals arising from the order, including the order dated 30 March 2026 in Appeal No. 04 of 2024, available through public legal records.

This report is based on the Securities Appellate Tribunal's order dated 30 March 2026 in Appeal No. 04 of 2024 and related tribunal proceedings arising from IRDAI order IRDAI/F&I/ORD/MISC/106/7/2024 dated 23 July 2024, reviewed on 30 July 2026.