IRDAI has imposed a penalty of Rs. 35 lakh on Bharti Axa General Insurance for violating norms like soliciting policies through unauthorized agents and paying additional amount to its corporate agents which was over and above the commission.
The company was found to have solicited insurance policies through unauthorized agents. In fact, in a few instances, the company had paid commission to these unlicensed agents and entities which was higher than the stipulated commission structure of intermediaries, found IRDAI.
Meanwhile, IRDAI has found that the company had paid additional amount to a few of its corporate agents. The insurance company gave incentives to corporate agents in the form of other expenses like advertising cost, infrastructure etc. IRDAI norms restrict an insurance company from paying any amount other than the permitted agency commission, whether as administration charge, reimbursement of expenses, profit commission or any other form to corporate agents. Also, an insurer cannot reimburse its corporate agents for co-branded advertisements.
IRDAI has instructed the company to pay the penalty amount within 15 days i.e. by 24 August 16, 2016.