The Insurance Regulatory and Development Authority (Irda) has slapped a fine of Rs 1.47 crore on HDFC Life Insurance for violating norms pertaining to the commission paid to corporate agents and denial of death claims.
The private life insurer was charged for seven violations after Irda, the insurance sector regulator, made inspections between July 26 and 30 in 2010 on 25 possible violations.
Irda found 21 instances of the insurer denying death claims under home loan protection policies, and was fined Rs 1.05 crore. Besides, the regulator found seven instances of the insurer paying commission beyond prescribed limits to its corporate agents, and was fined Rs 35 lakh.
“Under the guise of utilising network of marketing and advertising campaigns, sums ranging from Rs 6 lakh to Rs 286.92 crore were paid to HDFC (Housing Develop-ment Finance Corp), HDFC Bank, HDFC Securities and HDB Financial Services, which are the corporate agents of the insurer,” Irda said, adding it would take further actions against these entities for receiving commission over the permissible limit. Irda has also fined the life insurer Rs 5 lakh for soliciting insurance business from unlicensed individuals and entities.
The regulator has directed HDFC Life to pay the penalty within 15 days. Amitabh Chaudhury, managing director and chief executive officer of HDFC Life, was present during the hearing.
This was the second instance in less than a month where a large private life insurance company has been fined by Irda. Last month, the regulator had slapped a fine of Rs 1.18 crore on ICICI Prudential Life, the second largest private life insurer in the country for violating norms pertaining to commission paid to corporate agents, referral agents and brokers. The insurer was charged for six violations after Irda made inspections between November and December 2010 on 42 possible violations.