IRDAI has imposed fine of Rs.10 lakh on Bajaj Allianz General Insurance and Rs.13 lakh on Liberty General Insurance for violating motor insurance distribution norms.
Both the insurers have been fined for violating Motor Insurance Service Provider (MISP) norms. MISPs are basically automobile dealers having distribution license to sell motor insurance policies to their customer at the time of selling vehicles.
IRDAI has found that Bajaj Allianz sold motor insurance policies through an automobile dealer without appointing him as MISP.
On the other hand, Liberty General paid additional payment to its MISP for marketing purposes which was over and above commission. MISP guidelines do not allow insurers to make additional payouts to automobile dealer.
In September 2017, IRDAI introduced this distribution channel to increase the sales of motor insurance policies.