IRDAI has imposed a fine of Rs.1.01 crore on Cholamandalam MS General Insurance for violation of the regulatory norms such as paying commission on ported policies and offering discount on premium.
In its inspection, IRDAI found that the general insurer had extended discount of 55% on gross premium to a policyholder. This policyholder was among one of the vendors of the insurer. IRDAI has imposed Rs.1 lakh for this violation.
IRDAI has also found that the insurance company had paid commission to intermediaries like agents and brokers on ported health insurance policies. Overall, the insurer had paid commission to the extent of Rs.6843 crore over the period of two years.
According to IRDAI norms, insurers cannot pay commission to intermediary on acceptance of a ported policy. “As portability is an option given directly to the insured, there is no role of an intermediary and, hence, no commission shall be payable by an insurer to any intermediary in the year of porting,” said IRDAI. The insurance regulator has imposed a fine of Rs.1 crore for this violation.
