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IRDA Urges Reliance Life Insurance to Pay a Penalty of Rs. 1.77 Cr
- DetailsWritten by PolicyBazaar -
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Modified 14 April 2014
Rs 25 lakh fine charged because of service agreements signed with several entities hired for offering services of lead generation and dissemination of information
The Insurance Regulatory and Development Authority (Irda) has charged a number of penalties, amounting to Rs 1.77 crore, on Reliance Life Insurance for violation of sectoral rules.
One penalty of Rs 25 lakh was imposed because of entering into service agreements with various entities, which according to Irda were also engaged for providing services of lead generation and dissemination of information. Entering into such agreements with various third parties is violation of the Insurance Advertisement Regulations Act, 2000.
Another Rs 25 lakh penalty was forced as Irda alleged that the procedure used in issuing cheques favouring the Master Policy Holder was against its group insurance guidelines. It says Reliance has been committing this violation since 2009-10 and is carrying on with it. The company has been asked to issue death claim cheques directly in favour of the nominee or beneficiary of the deceased member of a group insurance scheme.
Besides these, penalties were imposed for acquiring business from unlicensed individuals or entities thus breaching of Irda norms. The company has been told to confirm the compliance in respect of all other directions in the order within 15 days.
Also, Irda had asked private life insurer HDFC Life to abide by earlier directions with respect to file-and-use norms. In September 2013, it had warned HDFC Life against breach of the guidelines in this regard, of changing the terms and conditions of approved versions of the products without prior consent from Irda.
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