IRDAI slaps Rs 20 lakh penalty on Oriental Insurance Co

IRDAI slaps Rs 20 lakh penalty on Oriental Insurance Co

Insurance regulator IRDAI has imposed a penalty of Rs 20 lakh on state-owned Oriental Insurance Company for violation of guidelines including those related to solicitation and group insurance.

There were four charges on the general insurer and the Insurance Regulatory and Development Authority of India (Irdai) has imposed fine of Rs 5 lakh against each of them.

"...as directed under the respective charges, the penalty of Rs 20 lakh shall be debited to the shareholders' account of the general insurer and the amount shall be remitted to the Irdai within a period of 15 days...," the regulator in its order said.

One of the charges was that the insurer instead of using its own portal had entered into an agreement to use the portal of Hero Corporate Services Ltd (HCSL) who is also a corporate agent of another general insurance company.

The regulator also observed from sample Memorandum of Understanding (MoU) copies that no entity/motor dealer with which the insurer has entered into agreement is a licensed entity by the regulator.

While commenting on the charge, the IRDA said, "...it is evident that insurer has violated the Authority guidelines and solicited business from motor dealers without being licensed and payments were made under the head of infrastructure and also entered into an additional relationship with licensed entity of another insurer."

The IRDA gave its final order in the matter of the general insurer based on reply of the Show Cause Notice and submissions made during personal hearing.

Source:Banking Updates