Irdai has imposed a penalty of Rs 35 lakh on Future Generali India Insurance Co for violating various laws including the ones related to payments, licensing of insurance agents and file and use policy.
"In conclusion, as directed under the respective charges, the penalty of Rs 35 lakh shall be debited to shareholders' account of the general insurer," Insurance Regulatory and Development Authority of India (Irdai) said in an order.
It has asked the company to remit the amount within a period of 15 days.
The company was found to be making payments to its intermediaries under accounting heads as support services, consultancy that were not reported to the Authority, it said.
Irdai said it was in violation of Insurance Act and imposed a fine of Rs 5 lakh for the contravention.
A similar penalty of Rs 5 lakh was imposed for not giving a clear picture of insurance agents engaged by the company. Further, the insurer was allowing agents to solicit business even after expiry of their license, Irdai said.
Among others, it said the insurer paid remuneration on database converted into sales more than once and the referral fee was paid to referral entities as many times as the policies were issued to same client.
"The insurer has violated Regulation on Sharing of database for distribution of insurance products and...Imposes a penalty of Rs 5 lakh".
Same amount of penalty was imposed for violating file and use policy.
Irdai said asked the general insurer to confirm compliance in respect of all the directions in the order.
Meanwhile, commenting on IRDAI's order, Future Generali India Insurance Company said that it adheres to the guidelines and has already taken corrective measures. "We have received the final order from IRDAI and have duly noted their observations. As an ISO certified company, we strictly adhere to the guidelines of corporate governance," said Future Generali India Insurance Company spokesperson.
He further said: "The lapses mentioned in the order are based on an audit conducted in 2013 and we have already taken corrective measures to ensure such error of judgement does not occur in future."
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