Insurance Regulatory and Development Authority of India (IRDA) today slapped a penalty of Rs 10 Lakhs on Tata AIA Life Insurance for surfeit payment to corporate agents.
Additionally, the insurance regulator has imposed a penalty of Rs 5 Lakhs on IndiaFirst Life Insurance for offering non-financial incentives to staff of corporate agents.
IRDA in regard to penalty on Tata AIA Life said, “It was observed that Tata AIA Life took no corrective action against the penalty order dated August 13, 2012 for the violations of 2010-11 and 2011-12. In both these previous FY, the insurer was penalized for excess payouts to corporate agents, but they failed to correct their repeated violation. The penalty of Rs 10 Lakhs imposed on the insurer will be remitted within a period of 15 days from the date of receipt of this order.”
For IndiaFirst Life Insurance, IRDA retorted, “The insurer non-financial incentive is unacceptable as Clause 21 of Corporate Agents guidelines ban insurance companies to pay corporate agents or incur expenses towards them except towards co-branding advertisements.”
The regulator further added, “The non-financial incentives rendered to the corporate agent’s staff are accounted under head commission, which is again the violation of norms. In regards to fact and guidelines, the violations committed by IndiaFirst Life Insurance are grave, and IRDA has the complete authority to exercise its powers under section 102 of the Act, and thus has imposed a penalty of Rs 5 Lakhs for violation.”
Source: This news was published on July 06, 2015 in economictimes.indiatimes.com under the title: “IRDA slaps fine of Rs 10 Lakh on Tata AIA Life Insurance”