"... Hereby direct the insurer (HDFC Life Insurance) to remit the penalty of Rs 1.47 crore," IRDA said in a strongly-worded order.
"A penalty of this nature is a regulatory necessity in order to impress upon management of any insurance company that regulatory prescriptions have to be complied with at all times and failure to do so will entail appropriate regulatory action," the order signed by IRDA Chairman J Hari Narayan said.
The maximum penalty of Rs 1.05 crore was imposed in a case of death claim under home loan protection policies. The claim was denied in a case where death occurred within 90 days from the date of commencement of the policy despite the IRDA advising the insurer to delete this exclusion clause.
"...The insurer had no business inserting a clause of 90 day waiting period knowing fully well that the Authority had specifically directed that such clause may not be included," the order said.
"This clearly shows the scant regard paid by the insurer to the directions of the Authority on a matter which critically affects the policyholder welfare," it said.
The regulator also said that penalty should be remitted by the insurer within a period of 15 days from the date of receipt of this order.
