CCI said that the case is not under the purview of competition norms.
Competition Commission of India (CCI) has rejected the case against IRDA to restrict the insurance regulator from granting licenses to banks under bancassurance model. CCI prevents activities that have an adverse effect on competition in India.
The commission has clarified that the case is not under its jurisdiction. In its order which Cafemutual has reviewed, the commission said, “Regulatory actions are not per se amenable to the jurisdiction of the commission.”
The commission also said that IRDA was discharging its regulatory and statutory mandate and did not fall within the purview of competition norms.
Earlier, a petitioner Dilip Modwil has appealed to CCI to direct IRDA to restrict banks from carrying out distribution business. His contention was that banks leverage their dominant positions, wide network and database to solicit insurance policies affecting the business of individual agents and insurance brokers which creates unfair competition.
IRDA, in its reply to this allegation, said that it has granted corporate agency licenses to banks under bancassurance model in order to increase insurance penetration. “It was believed that such retailing would raise competition which in turn benefits the consumers in terms of increased access to insurance products, increase in the quality of services, etc.,” said IRDA.
In the order, the commission said that IRDA has been set up under IRDA Act to protect the interests of policyholders and regulate insurance companies. Hence, it is discharging its regulatory and statutory mandate, the commission added.