Irdai imposes Rs 16 lakh fine on IDBI Federal Life Insurance

Sectoral regulator Irdai has imposed a penalty of Rs 16 lakh on IDBI Federal Life Insurance Company Ltd for violation of norms, including higher commission payment.
"... As directed under the respective charges, the penalty of Rs 16 lakh shall be remitted by the Life Insurer within a period of 15 days from the date of receipt of this order," the Insurance Regulatory and Development Authority of India (Irdai) said in its order.
"...The Life Insurer shall not pay any amount other than permitted agency commission, in any form, except sharing for reasonable expenses. Hence, the Authority imposes a penalty of Rs 10 lakh on the Life Insurer."

IDBI Federal Life was also imposed a fine of Rs 5 lakh for payment of selling and distribution expenses over and above approved commissions.
"...It is found that the selling and distribution expenses are paid on procuring certain number of policies, premium of specific products. Hence, the expenses paid are over and above approved commissioners structure of the said products. Hence, the Life Insurer is hereby levied a penalty of Rs 5 lakh."
Penalty of Rs 1 lakh was imposed for death settlement claim to master policy holder under non-employer-employee group policies.
"Payment of claims monies in favour of master policy holder is in violation...The Life Insurer is relying on only confirmation from the master policy holder of having taken discharge from the respective beneficiary.

"The Life Insurer is levied a penalty of Rs 1 lakh for the violation and hereby directed to discontinue the practice of settlement claims in favour of master policy holder hereinafter," it said.