IRDA has imposed a fine of Rs 35 lakh on insurance broking arm of India Infoline (IIFL) for violating norms related to free look cancellation, distribution of free insurance policies to prospective clients as inducements and carrying out sales activities by employing unqualified professionals.
The regulator said that it had received a total of 6606 complaints against the insurance broker out of which 5089 grievances were related to mis-selling, 814 for forgery and 139 for misappropriation of premium.
On inspection, IRDA found that IIFL Insurance Broker has not provided sufficient details of cover availability (restricting choice) and not properly assisted policyholders in their premium payments to its clients.
On increasing number of free look cancellations, IRDA has advised the insurance broker to strengthen their systems to reduce the cancellations. IRDA found that the company had distributed free insurance coverage to customers under group insurance policies as inducements. The broker had also found to be violated Distance Marketing Guidelines by appointing unqualified Authorized Verifiers for the purpose of solicitation of sales over telephonic mode.
The regulator has imposed a fine of 25 lakh on the insurance broker for employing unqualified officials to carry out sales business and Rs 5 lakh each for free look cancellations and distributing free insurance policies to clients under group insurance policies.
The regulator has temporarily rejected the IIFL Insurance Broker’s renewal application due to personal hearings and asked them to pay the imposed penalty for renewal of license. The license will be renewed till November 26, 2014.