Insurance regulator IRDAI has imposed a penalty of ₹1 crore each on general insurers ICICI Lombard and Tata AIG. It also imposed a total penalty of ₹2 lakh on Bajaj Allianz, another GIC.
In the case of ICICI Lombard, the regulator held that the insurer had violated the regulation with regard to the maximum allowable policy term for group and individual health products.
In the case of Tata AIG, an on-site inspection of corporate agent Tata Capital Financial Services revealed certain violations of regulations on protection of policyholders’ interests, the IRDAI said.
It also led to the the regulator seeking clarifications from Tata AIG GIC and finding that the general insurer had not complied with certain provisions.
According to the IRDAI order, “the findings of the inspection were that the corporate agent collected renewal premium at the time of issue of a three-year policy issued by the general insurer. To fund this amount of three-year policy premium plus another three-year renewal premium, the corporate agent provided loan to the policyholders and charged interest at 12.25 / 13% p.a. in respect of some policies picked up on sample basis during inspection.”
The regulator said the policyholder ends up paying interest unnecessarily when the corporate agent gives a loan for renewal premium which is payable three years later on. Noting that the general insurer is expected to ensure the consent of the client is obtained for paying advance renewal premium, IRDAI, while imposing the penalty, said the insurer should be extra careful with a corporate agent which also has a lending business which may have potential conflict with the business of an insurance intermediary.
In its order against Bajaj Allianz, IRDAI said the insurer had violated the ‘File and Use’ guidelines by issuing two policies with a product name different from that approved under the ‘File and Use’ procedure. A penalty of ₹1 lakh for lapse noticed in each of the two policies is imposed on the general insurer, IRDAI said.
Published - January 29, 2020 10:20 pm IST
