IRDAI has imposed a fine of Rs20 lakh on Tata AIG General Insurance for violating various regulatory norms – like making additional payouts to corporate agents and soliciting business through unauthorised agents.
The insurance regulator has found that Tata AIG made additional payments to their corporate agents, which were over and above the stipulated commission structure. The company paid money towards marketing costs and infrastructure arrangements to its corporate agents.
The insurer also made additional payments to individual agents by way of fees for professional or technical services.
IRDAI norms do not allow insurers to compensate their agents other than paying a commission.
The insurance regulator also found that Tata AIG sold insurance policies through unauthorised agents and entities. Some of these agents were motor dealers and owner of automobile showrooms.
IRDAI has directed the company to discontinue such practices and asked it to pay the penalty within 21 days.