IRDAI has imposed a fine of Rs.5 lakh each on two general insurance companies - IFFCO Tokio and Royal Sundaram.
The insurance regulator has found that both IFFCO Tokio and Royal Sundaram have incorporated changes to the insured declared value (IDV) of vehicles during the policy term at the time of claim settlement. IDV is the sum insured offered by insurer in case of theft or total loss of vehicle. Simply put, IDV is the current market value of the vehicle by factoring in depreciation.
IRDAI norms do not allow general insurance to depreciate IDV at the time of claim settlement.
The companies were also found to have violated file and use guidelines of IRDAI.
The regulator has asked both the companies to pay the fine within 15 days.