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IRDAI has imposed a fine of Rs.3 crore on Max Life Insurance Company and Rs.2 crore on its corporate agent and shareholder Axis Bank.
The insurance regulator has found that Axis Bank had not complied with the directions issued by IRDAI and made undue gains during transfer of shares between Axis Bank and Max Insurance. IRDAI said that the transfer of shares was not done at fair market value. Currently, the bank has a little over 12% stake in Max Life insurance.
Further, this gain resulted in remuneration which is over and above IRDAI payment of commission and reward norms. IRDAI said that the company circumvented the provision of the insurance act and received remuneration in excess of the limit specified by IRDAI.
In another order, IRDAI has fined Max Life Insurance Rs.3 crore for not adhering to IRDAI norms like transferring of share at unfair market value, giving undue monetary gain to its corporate agent, which is over and above commission and rewards and misrepresenting facts.