IRDAI has imposed a fine of Rs.65 lakh on India First Life Insurance for violation of various norms like bundling insurance policies with bank products, soliciting business with unauthorized agents, luring employees of broking firms with gifts/rewards and making additional payouts to its corporate agents for advertisement. The insurance regulator has examined 48 such violations of India First Life.
Of the total Rs.65 lakh, Rs.20 lakh was imposed for bundling life insurance policies with banking products. Its two corporate agents - Bank of Baroda and Andhra Bank, who are the promoters of this company, were found to have bundled life insurance policies with their bank products called Baroda First Wealth Pack (Bank of Baroda) and Abhaya First Wealth Pact (Andhra Bank), offering wealth management solution to investors which is violation of file and use guidelines.
The insurance regulator has also found that the company had sold such policies through unauthorized sales persons of these two banks. Also, the insurance regulator has found that the company had lured employees of these banks with gifts and rewards. These payout were over and above the commission.
In addition, the regulator observed that the insurer had paid its corporate agents for carrying out marketing activities. Earlier, a few companies like Reliance Life Max Life, Bajaj Allianz and Future Generali were penalized for a similar offense.
IRDA has asked India First to pay the penalty money by June 10.