IRDAI has imposed a fine of Rs. 20 lakh for violating various regulatory norms like collecting advance premium on ULIPs, incorporating changes in policies without taking prior approval from IRDAI, appointing underqualified people to train advisors and incentivizing unlicensed agents.
IRDAI has found that the company had collected advance premium from policyholders while issuing ULIPs and had not allocated units even after collecting premiums.
Further, the insurance regulator has found that the company had incorporated changes like introducing a waiting period of 45 days on issuance of new group insurance and excluding death coverage for the first 90 days. These changes were incorporated without prior approval from IRDAI.
Another violation was recruiting underqualified people to train Birla Sun Life agents. In a few instances, the company had hired inspirational speakers who didn’t have qualification to mentor agents and brokers.
Also, the regulator found that the company had incentivized unauthorized sales persons through gifts and foreign trips on achieving certain targets. The company had spent close to Rs. 4 crore on such activities.
IRDAI has directed the company to discontinue such practices and asked the company to pay the penalty within 15 days.