Also, the insurance regulator has imposed a fine of Rs one lakh on Tata AIA Life Insurance for violation of anti-money laundering (AML) norms.
IRDA has warned HDFC Standard Life for violation of anti-money laundering (AML) norms and instructed it to strictly comply with AML norms while issuing insurance policies to their customers.
IRDA found that HDFC Standard Life failed to determine Suspicious Transaction Reports (STRs). The company had received multiple demand drafts (DD) towards premiums in some cases which were not reviewed. The regulator said, “Instances are noticed where multiple DDs received towards premium were not reviewed from the perspective of reporting STRs. Further, it is also noticed that DDs collected were accounted as cheques which may potentially lead to the problem of escaping the attention while reviewing the transaction.” IRDA has asked life insurers to take necessary action in such transactions and report them within 30 days i.e. by March 13, 2014.
The insurance regulator has observed that the insurer didn’t assess financial viability of its customers while issuing policies. In some cases, the annual premium paid towards insurance policies didn’t match with the annual income of the policyholders.
Also, IRDA has observed that few policies issued to customers were not sourced by the licensed person of its corporate agent. These policies carried unidentified signatures. In addition, the insurance regulator also found that the company didn’t impart refresher training for specified persons of its corporate agent i.e. HDFC Bank. It has asked the life insurer to put in place a training system for its corporate agent.
In a separate case, IRDA has imposed a fine of Rs. 1 lakh on Tata AIA Life Insurance for accepting premium of more than Rs 50,000 without pan card and not putting in place a system to report suspicious cash transaction.
The insurance regulator has also found that the company has not mentioned binding clause with KYC norms while entering into agreement with its agents. Also, the insurer has created multiple payer identities of single person, said IRDA. In addition, the regulator has noticed that the insurer failed to carry out due diligence in some instances.
Earlier in January, IRDA had directed LIC, ICICI Prudential, Birla Sun Life and Max Life Insurance to comply with AML guidelines.