Insurance regulator Irda today imposed a fine of Rs 70 lakh on SBI Life Insurance for paying excess commission to the agents in violation of the group insurance guidelines.
"Considering the gross and continued nature of the violations, the Authority has come to the conclusion that it is just and proper to impose a penalty of Rs 5 lakh each for such payments made in 14 instances to Corporate Agents and Master Policy Holders totalling Rs 70 lakh," Irda said in an order.
The Insurance regulatory and development Authority (Irda) said that as per the guidelines, SBI Life was required to pay group administration expenses to Master Policyholders.
Under the guidelines, insurers can pay commission only to agents or corporate agents within the limits prescribed by the Authority.
SBI Life, Irda added, has paid commission to 14 master policyholders in violation of the guidelines.
"The insurer has failed to adhere to the guideline every time such payment is made," added the order, issued by Irda Chairman J Hari Narayan.
SBI Life Insurance is a joint venture between State Bank of India and BNP Paribas Cardif. SBI owns 74% of the total capital and BNP the remaining 26%.
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