IRDAI has imposed a fine of Rs. 6 lakh for violating file and use norm and settling insurance claim in favor of master policy holder.
The regulator imposed a fine of Rs. 1 lakh for settling group insurance claim in favor of master policy holder instead of the beneficiary. Further, the life insurer had not obtained a confirmation of receipt of claim payment from the beneficiaries.
On the second charge, IRDAI imposed a fine of Rs. 5 lakh for covering a loan term of less than three years and providing a flat cover of Rs. 5,000 for the balance period (three years) through its Shriram Credit Shield policy to truck operators. In its defense, the company said that it had given a cover to truck drivers who had a loan term of less than three years and the company did not have a product to cater to this need. IRDAI said that the company cannot justify deviation from file and use rules. “The life insurer should note that whenever the demand of a specific feature that is not available in the approved file and use, they shall approach the authority for revision of the product in order to include the required feature,” said IRDAI.
IRDAI has asked Shriram Life Insurance to pay the penalty amount within 15 days from the receipt of this order.