Indian insurance regulator Monday fined private life insurer Aviva Life Insurance Company Ltd for violating and deviating from the fundamental principles of life insurance contracts and certain regulatory provisions.
The regulator also ordered the company to pay back additional premium charged from policyholders without their prior consent on various policies along with interest.
Levying a fine of Rs.500,000 on Aviva Life Insurance, Insurance Regulatory and Development Authority (IRDA) chairman T.S.Vijayan said in his order that informing the policyholders of additional premium while sending the policy document is considered as a serious violation of "fair business practices" and "regulatory provisions."
In respect of policies where the terms and conditions were modified and issued without the prior consent of the policyholders, the IRDA chief directed Aviva Life to restore the terms and conditions as originally proposed.
The company was directed to refund the additional premium or charges collected alongwith half-yearly compounding interest at a rate which is two percent above the bank rate prevalent as on April 1, 2014 by debiting shareholder's account.
The company is a joint venture between India's Dabur group and the Britain's Aviva group.