In a set back to the Insurance Regulatory and Development Authority (IRDA), the Bombay High Court has passed an order asking the regulator to consider the application for renewal of broking licence of Willis India Insurance Brokers (WIIB) that it had earlier rejected and pass a final order within a month.
"After giving an appropriate opportunity to the petitioners (WIIB), an appropriate decision may be taken within four weeks and that too after hearing the petitioners," the March 7 Bombay High Court order said.
WIIB had challenged the IRDA order in November 2010 rejecting the application for renewal of its licence as a composite insurance broker.
In October the high court had asked the IRDA to set up a two-member committee on WIIB’s application for renewal.
A month later the two member committee comprising IRDA members G Prabhakara and M Ramaprasad rejected the application on grounds that there was an dispute between Bhaichand Amoluk Consultancy — the 74% equity holder in WIIB — and Export Credit Guarantee Corporation (ECGC).
The committee had also ruled that WIIB had violated stipulated norms by investing insurance money in fixed deposits between 2003-04 to 2006-2007.
The court ruled that the dispute between Bhaichand and ECGC was not relevant in considering the application for WIIB’s renewal of its licence.
Netherlands’s Willis Europe B.V. holds 26% stake in WIIB.
"Since we have found that non-disclosure of the dispute between Bhaichand and ECGC was a relevant aspect, the same may not be taken into consideration while deciding the renewal application afresh," the court said.
On violation of investment norms, the court said WIIB should be given the appropriate opportunity to explain its position. "Petitioners (WIIB) may be given hearing on the question about the alleged violation of Regulation 23 which is in connection of charging interest," the court order said.
"The earlier committee which took the decision now may take a fresh decision on the renewal application in accordance with law," the court order said.