Prices Increasing soon Prices Increasing Soon

The Biggest Refund Order of Rs. 275 Crore Issued by IRDA to SBI

IRDA ordered SBI life to refund Rs 275 crore paid as excess commissions to the corporate intermediaries from the wrongly collected premiums collected under the “Dhanraksha Plus LPPT”, by misrepresenting the nature of the plan.
Mar 12, 2014, MUMBAI: IRDA, the insurance regulatory authority has ordered SBI life to refund Rs. 275 crore making it the biggest refund order in the history of the Indian insurance industry, a move that shall benefit over 7.5 lakh borrowers of State Bank of India Group. SBI life was earlier fined for mis-selling one of its plan named “Dhanraksha Plus LPPT”, has now been ordered to refund the money which has been accounted under the excess commissions it has paid out of premium collected under this policy.

Read more
Gets ₹1 Cr. Life Cover at just
COVID-19 Covered
The Policybazaar Advantage
Dedicated claim support for family FREE
Upto 10% discount# for buying online
Only certified experts will call you on 100% recorded lines
We are rated~
rating
7.7 Crore
Registered Consumer
50
Insurance Partners
4.2 Crore
Policies Sold

#All savings and online discounts are provided by insurers as per IRDAI approved insurance plans | Standard Terms and Conditions Apply

By clicking on "View plans" you agree to our Privacy Policy and Terms of use

~Source - Google Review Rating available on:- http://bit.ly/3J20bXZ

Life is Unpredictable! Protect your family’s future
Get ₹1 Crore Life cover starting from /month+
+91
Secure
We don’t spam
Check Your Premium Now
Please wait. We Are Processing..
Get Updates on WhatsApp
The Policybazaar Advantage
Policybazaar Advantage Icon
Dedicated claim support for family FREE
Policybazaar team will help and support you at the time of claim. A personal claim handler from our team of experts will get in touch with you when your nominee applies for a claim on our website.
Policybazaar Advantage Icon
100% calls recorded to ensure no mis-selling
We will make sure you get what is promised by the advisors. We conduct regular monitoring of our calls to make sure you get the best experience.
Policybazaar Advantage Icon
Exclusive lifetime discount upto 5% for buying online
The discounts will be valid for the entire policy payment term and is not available if you choose to buy the insurance through offline agents.
Policybazaar Advantage Icon
Advisors available in your city
Our advisors are available in more than 55 cities across India and can help you at your doorstep in understanding the plans and in documentation.
Policybazaar Advantage Icon
Refund at the click of a button
In case you aren’t happy with your purchase, you can cancel your policy hassle-free at the click of a button. We will help you with the cancellation and refund of your policy.

The people who bought the policy in question during the period of 2008-09 and 2010-11 would be the main beneficiaries of the refund order, according to which the policyholders will get 44% of the Rs 625 crore premiums that was collectively paid by them for the plan. If sources were to be believed, these were the same customers who were sold a home loan by SBI and its associate banks and the plan’s intentions would be to cover the outstanding loan amount that the customer would not be able to pay in case he/she demises.

This plan as being positioned by SBI life was meant to be a two-year paying term but the premium was collected upfront by the insurer, despite the fact that the insurer had a single premium version of the product only. According to IRDA, this positioning as a two year premium plan allowed the insurer to pay 40% of the first year premium and 7.5% of the second year premium as commission to the bank, while had the plan been a single premium version the commission would have just amounted to 2% making its high scale sales a higher commission earning machine for the insurance intermediaries who majorly surmise to SBI and some of its associated banks.

This has resulted in commitment to three major offenses on the part of the insurer:

  • Representing a skewed nature of the policy
  • Payment of the excess commission to the corporate intermediaries
  • Keeping the buyers from a better informed choice or better informed choices

Initial investigations prompted IRDA to impose a penalty of Rs. 5 lakh on the insurer, but further investigations revealed that an excess payment of 44% of one installment of the regular premium received upfront in addition to the new business premium accounted for the first year was made to the corporate intermediaries. The original order primarily announced that a sum of Rs 275 crores (approximately 44% of regular premium of Rs.625.67 crore received in advance upfront along with the First Year's premium) has to be refunded to the members/beneficiaries of the scheme under question here as the premiums collected under the same for the periods of 2008-09, 2009-10 and 2010-11 were skewed and wrongly collected.

Furthering the conclusions of the above investigations, a show-cause notice was issued against SBI life in April 2013, and the insurer was questioned as to why the directions under section 34 of the Act of refunding be not issued for refunding the referred amount which was paid as excess commissions to the members of the group (intermediaries). In June 2013, SBI life made required submissions and on December 4th it was followed by a formal hearing, after which IRDA made a decision of ordering the refund.


Premium By Age

Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. This list of plans listed here comprise of insurance products offered by all the insurance partners of Policybazaar. For a complete list of insurers in India refer to the Insurance Regulatory and Development Authority of India website, www.irdai.gov.in



Choose Term Insurance Plan as per you need

Plans starting from @ ₹473/Month*
Term Insurance
1 Crore Term Insurance
Term Insurance
2 Crore Term Insurance
Term Insurance
4 Crore Term Insurance
Term Insurance
5 Crore Term Insurance
Term Insurance
6 Crore Term Insurance
Term Insurance
7 Crore Term Insurance
Term Insurance
7.5 Crore Term Insurance
Term Insurance
8 Crore Term Insurance
Term Insurance
9 Crore Term Insurance
Term Insurance
15 Crore Term Insurance
Term Insurance
20 Crore Term Insurance
Term Insurance
25 Crore Term Insurance
Term Insurance
30 Crore Term Insurance
Term Insurance
15 Lakh Term Insurance
Term Insurance
60 Lakh Term Insurance

Life Insurance Articles

  • Recent Article
  • Popular Articles
24 Apr 2024

Most Common Life Insurance Frauds in India

Life insurance fraud is a financial crime that can be committed

Read more
09 Aug 2023

What High Net Worth Individuals (HNIs) Do To...

High net worth individuals often opt for life insurance plans to

Read more
28 Jun 2023

A Review Of ICICI Prudential Life Insurance

“Policy Bazaar insurance clarified the term policy for me, so

Read more
27 Jun 2023

A Review Of HDFC Life Insurance

“I recently bought an HDFC term plan and it is the best

Read more
20 Jun 2023

Life Insurance Policy in India with High Returns

The life insurance policy in India is a type of life insurance

Read more

SBI Life Insurance 50,000 per year Plan for 5...

Life insurance is about the financial protection of the family and working for life’s milestones through smart

Read more

How to Check PLI Status?

Postal Life Insurance (PLI), one of the oldest life insurers in India, was introduced in February, 1884. Started

Read more

SBI Life Insurance Policy Surrender Value...

SBI life insurance policy surrender value calculator is an online tool that helps users calculate the amount they

Read more

PLI Surrender Value Calculator

Postal Life Insurance (PLI) is an insurance plan for Indian government and semi-government employees and

Read more
Need Help? Request Callback
top
View Plans
Close
Download the Policybazaar app
to manage all your insurance needs.
INSTALL