Regulator said the insurer made payouts to entities and an individual agent in violation of norms, and asked it to place the order before its board and submit an action report
The regulator also asked the insurer to place the order before its board at the upcoming board meeting and to provide a copy of the minutes of the discussion
The Insurance Regulatory and Development Authority of India (Irdai) on Friday imposed a ₹1 crore penalty on Reliance General Insurance for violation of norms.
What violations did Irdai flag against Reliance General Insurance?
The regulator found that the insurer made payouts of around ₹5.16 crore during FY19 to Glitterbug Technologies, the parent company of Coverfox Insurance Broking, and made multiple arbitrary payouts to an individual who is an agent of Oriental Insurance Company. Reliance General Insurance paid nearly ₹1.14 crore, ₹27 lakh and ₹28.67 lakh to the said agent during the financial years 2018-19, 2019-20 and 2020-21, respectively.
What other payments did the regulator cite?
It also made payments of around ₹2.92 crore, ₹5.33 crore and ₹9.45 lakh during the financial years 2018-19, 2019-20 and 2020-21, respectively, to an unlicensed entity, Suvidhaa Infoserve, for marketing and advertising services under the terms of the agreement. It also paid Aditya Birla Housing Finance and IndusInd Bank ₹2.89 crore and ₹2.36 crore, respectively, which were in the nature of other than corporate agency commission.
What directions did Irdai issue to the insurer?
The regulator also asked the insurer to place the order before its board at the upcoming board meeting and to provide a copy of the minutes of the discussion. Additionally, the insurer has to submit an action taken report to Irdai on the directions given within 90 days from the date of the order.
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