Sunday, 13 April 2014

IRDA slaps Rs 1.77 cr fine on Reliance Life

Insurance regulator IRDA imposed a fine of Rs 1.77 crore on Reliance Life 
Insurance for violation of various norms including obtaining business from 
unlicensed entities.
"...the penalty of Rs 1.77 crore shall be remitted by the Life insurer by debiting 
shareholders’ account within a period of 15 days from the date of issuance of this 
order...," IRDA said in an order.
It is observed that the Life Insurer has failed to monitor the activities of the 
corporate agent, it said, adding that this is considered as a serious lapse and 
the insurer is warned for the same.
Insurance Regulatory and Development Authority (IIRDA) examined 47 charges leveled 
against the company including violation of advertisement and product distribution 
norms.
Instances are noticed where the business is sourced from unlicensed entities 
through Multi Level Marketing and was logged into the code of licensed entities, 
it said.
Business was procured by forged signatures or without signatures at the space 
specified in the agents confidential report column, it added.
Of the total charges, maximum penalty of Rs 65 lakh was imposed for soliciting 
insurance business from unlicensed entities.
IRDA said the business sourced through unlicensed entities was logged in various 
code numbers of Reliance Third Party Distribution Channel, which is one of the new
business verticals of the insurer.
"Hence, under powers vested in Section 102(b) of the Act, a penalty of Rs 60 lakh 
is levied on the life insurer," it said.
The regulator also slapped a fine of Rs 50 lakh for violation of marketing and 
publicity norms.
There was issue with regard to payments to referral entities under contests.
"It is observed that the insurer has made these payments to referral entities 
under contests in violation of provisions of Circular Ref. IRDA/Cir/004/2003 dated 
14/02/2003 and therefore a penalty of Rs 5 lakh is hereby imposed under Section 
102(b) of Insurance Act, 1938," it said.
Recently, IRDA asked SBI Life Insurance company to refund Rs 275.29 crore to the 
policy holders as the amount was collected from them in violation of norms.

3 comments:

Shyam Sundar said...

Recently Tata Life also started this multilevel marketing business. It is high time Tata realised their blunder and keep off from it.

Rakesh Agarwal said...

Hello Shyam

Thanks for sharing this information with its very good news for everyone.
Commercial Properties Advisors

Roger S said...

Sir, please inform all the candidate writing irda exam for ad visor not to fall prey from www.indianmoney.com
offering leads