Regulator cracks the whip on 8 life insurance firms
Life Insurance companies have seen a sharp rise in the number of warnings and penalties issued by the Insurance Regulatory and Development Authority in 2010 for violating regulations.india Updated: Aug 26, 2010 22:37 IST
Life Insurance companies have seen a sharp rise in the number of warnings and penalties issued by the Insurance Regulatory and Development Authority (IRDA) in 2010 for violating regulations.
The regulator issued warning and penalties to eight life insurance companies in 2010, as against one issued in 2009 and two in 2008.
The IRDA on Thursday fined Bharti Axa Life Insurance Rs10 lakh for not furnishing the details regarding the change in the ownership status of the promoter entity - Bharti Enterprises - from partnership firm to a private limited company.
In July 2010, the regulator imposed a Rs 10-lakh penalty on State Bank of India for deviating the File and Use process where there is a variation between the product cleared by the regulator and that being sold to the customer.
"One of the specific violations noted involved the insertion by the insurer of two clauses in the policy document "Super Suraksha" after its clearance by the authority under the File and Use process," said the regulator in its order.
Birla Sun Life and ING Vysya Life were also warned for File and Use deviations.
Two insurers LIC and HDFC Standard Life have been fined Rs 5 lakh each for not complying with rural sector obligations.
While LIC fell short of 2.6 lakh policies and procured 24.3 per cent of the total policies in 2008-09 from the rural areas as against the 25 per cent obligation.
HDFC Standard Life procured only 12.9 of its total policies from rural areas, compared to the obligation of 19 per cent.
The regulator also warned ICICI Prudential Life Insurance for referral agreements with non-banking entities and warned Bajaj Allianz for providing advances to employees as the insurance act prohibits grant of loans or temporary advances, except loans on life policies issued by it within their surrender value.