An Indian tax authority has launched an investigation into British insurance company Aviva, accusing it of violating local regulations on commission caps through fraudulent practices. According to a recent notice, Aviva is alleged to have used fake invoices and secret cash payments to bypass commission limits set for sales agents.

The notice, dated August 3, reveals that Aviva's Indian division allegedly paid approximately $26 million between 2017 and 2023 to various entities that supposedly offered marketing and training services. However, these vendors did not actually provide any services. Instead, they served as fronts for channeling funds to Aviva’s agents, according to the Directorate General of GST Intelligence, which monitors indirect tax violations.

The notice, which is not publicly available, was reported on for the first time and suggests that Aviva and its officials engaged in a conspiracy involving fake invoices to divert money to insurance distributors. The case is part of a larger investigation involving more than a dozen Indian insurers accused of evading $610 million in taxes, interest, and penalties. Aviva is specifically accused of using the fraudulent invoices to claim tax credits and evade $5.2 million in taxes.

In response to inquiries, a spokesperson for Aviva in the UK stated, "We do not comment on speculation or ongoing legal matters." Aviva’s Indian branch has not yet responded to questions about the investigation. A source familiar with the situation indicated that Aviva plans to challenge the allegations but has not formally addressed them yet.

The investigation report includes a 205-page document with evidence such as email and WhatsApp message screenshots between Aviva executives and insurance distributors, discussing ways to evade compensation regulations. It also summarizes interviews with Aviva India’s chief financial officer, Sonali Athalye, who explained how payments were made. Former Aviva India CEO Trevor Bull was also mentioned in a 2019 email regarding payments exceeding regulatory limits, suggesting that senior management may have been aware of the practices.

Aviva could face approximately $11 million in penalties, which aligns closely with its 2023 profit from life insurance sales in India.

Aviva's Indian operations are conducted through a joint venture with Dabur Invest Corp., a leading local company. Aviva holds a 74% stake in this venture, having increased its share from 49% in 2022.

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