Insurance sector regulator Irdai has slapped a fine of Rs 15 lakh on Shriram Transport Finance Company for selling insurance policies in violation of norms.
The Insurance Regulatory and Development Authority of India (Irdai) said Shriram Transport Finance as a corporate agent (CA) engaged persons other than specified persons (SPs) to procure business.
The matter pertains to selling of 983 policies by a specified person (SP) of the company between April 14, 2015 to March 28, 2017, even as the said person was relieved from employment on April 13, 2015.
In many cases, the proposal forms did not contain the details of intermediary/SP and signature of SP, Irdai said in an order, adding the firm has violated various clauses of Schedule-III under Regulation 26 of IRDAI (Registration of Corporate Agents) Regulations, 2015.
Moreover, among the 907 cases of endorsement (as declared by the CA), 277 policies were cancelled instead of being endorsed, it added.
"Cancellation of about 30 per cent of the policies claimed to have been solicited by the said SP before his relieving date, leads to the inevitable conclusion of mis-selling and use of unauthorized/untrained persons by the CA to procure business," Irdai said.
As directed under the respective charge, the penalty of Rs 15,00,000 shall be remitted by the CA within a period of 15 days from the date of receipt of this order, Irdai added.