Insurance sector regulator Irda has slapped a penalty of Rs 15 lakh on private life insurer Birla Sun Life Insurance Company for violating norms related with settlement of claims and micro insurance.
"The penalty amount of Rs 15 lakh shall be remitted by the Life Insurer by debiting the shareholders' account within a period of 15 days from the date of issuance of this order," Irda said.
As of March 31, 2014, Irda said as many as 61 per cent or 4,11,091 claims were outstanding from a total of 6,69,960 cases from 2001 to 2011.
"...And the amount outstanding is Rs 4.14 crore which is 67 per cent to the total premium received (Rs 6.14 crore)."
"Non settlement of the claims is in violation of regulation of protection of policyholders' interests and it is observed that the life insurer is not sensitive in paying adequate attention for settlement of the maturity claims," it added.
Irda said the life insurer grossly failed in protecting the interests of the policyholders and directed it to settle all the outstanding maturity claims within 180 days and also to furnish a monthly claims settlement report to it.
For violating micro insurance (MI) regulations, the regulator imposed a penalty of Rs 5 lakh on the insurer.
"The MI agent shall not distribute any product other than a micro insurance product. Hence, allowing an MI Agent to sell other than Micro Insurance Products is a violation of the Regulation. Therefore, the Authority...Levies a penalty of Rs 5 lakh on the life insurer for the said violation," Irda said.
