Both the insurers have been penalised with fine of Rs 15 lakh each.
"In conclusion, as directed under the respective charges, the penalty of Rs 15,00,000) shall be remitted by the general insurer by debiting shareholders' account within a period of 15 days from the date of receipt of this Order," Irdai said in two separate orders directed to each of the companies.
Irdai has pressed three charges on HDFC Ergo General Insurance and imposed a fine of Rs 5 lakh each in all cases.
"For the violations committed by the insurer by using unlicensed entities, a penalty of an amount of Rs 5 lakh is levied on the insurer under section 102 (b) of the Insurance Act, 1938," read the order.
Also Read
The regulator directed HDFC Ergo General Insurance to discontinue the practice of issuing intermediary codes to any entity/individual that is not qualified to solicit insurance business.
On Videocon Liberty, Irdai pressed three charges, imposing a fine of Rs 5 lakh in each of the cases. The company was found to be violating guidelines on outsourcing norms and F&U rules.
"The premium rates filed under File and Use include the Act of God (AOG) premium rates...The distorted rating structure with high discounts on basic rate and covering the reduction in basic premium by overcharging on catastrophic perils may mislead the reinsurance brokers to develop appropriate reinsurance terms in the reinsurance market," it said.
In view of the violations of F&U guidelines observed, the Authority in exercise of the powers vested under Section 102(b) of the Insurance Act, imposes a penalty of Rs 5 Lakh, said the Authority order.
Disclaimer: No Business Standard Journalist was involved in creation of this content