Insurance sector regulator IRDAI has slapped a penalty of Rs 85 lakh on Reliance Life for violation of various norms, including outsourcing guidelines.
"A penalty of Rs 85 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," IRDAI said in an order issued by its Chairman T S Vijayan.
The Insurance Regulatory and Development Authority of India (IRDAI) imposed a fine of Rs 30 lakh on Reliance Life Insurance Co. Ltd for making payments to Premier Training Pvt Ltd (PTPL) for violating outsourcing guidelines.
PTPL was engaged to perform customer contactablity programme with a very higher commercial terms of Rs 500 per policy. The penalty included for financial years 2011-12, 2012-13 and 2013-14.
"Agreeing to pay at the rate of Rs 500 per policy towards customer contactability from the existing policyholders in the remote area irrespective of the underlying premium is on a higher side.
"The Life Insurer has not substantiated how the Company has derived benefits in terms of renewing the business (policy or premium)," said the order.
Penalties of Rs 20 lakh and Rs 15 lakh were imposed for making higher payment to CRP Technologies in violation of outsourcing guidelines, as per the order document.
Pulling up the company for violating norms, IRDAI said that Board of the Life Insurer did not have adequate procedures in place to ensure regulatory compliance.
It also asked the company to review Corporate Business Policy and define the standards of business conduct and ethical behavior.
"The Authority has taken a serious note of non-compliance to the directions issued in the Final Order dated...And hereby expresses its displeasure and concern to the Board of the Life Insurer," it added.
