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Acting tough against fraudulent selling practices, IRDAI imposed a fine of Rs.2 crore on Dealmoney Securities, a stock broking company for fraudulent sales practices.
The insurance regulator barred the corporate agent from distributing and soliciting insurance policies.
This happened when the corporate agent did not report the status of litigation against it for allegedly fraudulent selling. Various media reports citing fraud committed by the employees of the corporate agent appeared in news outlets in Kolkata, Tripura, Odisha and various states of the North East.
IRDAI norms say that intermediaries will have to intimate IRDAI about such disputes within 30 days of the FIR. In fact, the company did not report about this during renewal. The penalty of Rs. 1 crore was imposed keeping in consideration that this non-compliance continued for more than 100 days.
Further, the insurance regulator imposed a fine of another Rs.1 crore for appointing unregistered third party lead generators for soliciting insurance policies. IRDAI does not allow intermediaries from engaging in any way with a third person to refer, solicit, generate lead, advise or provide contact details of the prospective policyholders for distribution of the insurance product.
Further, IRDAI said that due to the serious lapses and lack of corporate governance practices, it prohibited the intermediary from applying for registration as an ‘insurance intermediary’ and from soliciting insurance.
The insurance regulator directed the intermediary to continue its efforts to identify victims of the frauds and compensate them for their loss within 6 months.
