IRDA has imposed a whopping Rs 3.10 crore fine on Bajaj Allianz Life Insurance for violation of various norms such as file and use guidelines, corporate agent guidelines, pattern of investment, payment to referrals, group insurance guidelines and so on.
During the hearing of one such case, IRDA has said that the actions of Bajaj Allianz are not fair and against the interest of the policyholders.
In one of the instances, IRDA has imposed a fine of Rs 78 lakh on the insurance company for repudiating 78 death claims during 2010-11. The company had rejected these claims on ground of un-concluded contracts as the policyholders had died before receiving their policy documents. However, the regulator has found that the policyholders were died after the date of commencement of risk. As a result, IRDA has instructed the insurance company to settle these claims within 3 months along with the applicable interest rate.
Here are other fines imposed on Bajaj Allianz life insurance:
· Rs 70 lakh for making payments of Rs 15.50 crore in form of referral fees to its group policy holders
· Rs 40 lakh for disbursing substantial payment to a corporate agent (M/s Team Life Care) through different heads of account
· Rs 35 lakh for making multiple tie ups with corporate agents (unfair business practice)
· Rs 25 lakh for using defective policy administrating system
· Rs 20 lakh for disbursing higher commissions than what is permitted to its corporate agents in forms of advertisement, publicity and other expenses during 2010-11
· Rs 20 lakh for making additional payments to Master Policy Holders (under group insurance) in form of training, facilitation, infrastructure, fee for displaying logo and so on
· Rs 15 lakh for dissemination of information through related parties of insurance agents
· Rs 5 lakh for issuance of group policies with zero membership or less than 50 memberships
· Rs 1 lakh for investing in debt instrument of a private company (under a ULIP scheme)
· Rs 1 lakh for settling a death claim in favour of employer (Master policy holder) rather than employee under group insurance policy
Earlier, the authority had sought explanation and clarification in the matter from Bajaj Allianz Life Insurance through a show cause notice.The insurer had submitted its reply in February 2013.
The regulatory body has asked the life insurance company to submit the penalty amount within 15 days from the date of order i.e. on or before September 5, 2013.