Irda to probe money laundering allegations

Calls for data from HDFC Life, ICICI PruLife and Max Life

Insurance Regulatory and Development Authority (Irda) has taken up the alleged money laundering issue with the chief executive officers of HDFC Life Insurance, ICICI Prudential Life Insurance and Max Life Insurance.

In response to the sting operation conducted by news portal Cobrapost.com on this matter, Irda has also called for relevant data for initiating appropriate action.

"In response to the reports of sting operation conducted by Cobrapost.com alleging money laundering, the Insurance Regulatory and Development Authority has immediately taken up the matter with the CEOs of HDFC Life Insurance Co. Ltd., ICICI Prudential Life Insurance Co. Ltd. and Max Life Insurance Co. Ltd," said Irda.

The banking regulator, Reserve Bank of India (RBI) has also initiated a probe into the portal's claim and has asked for data from banks.

ICICI Bank, HDFC Bank and Axis Bank are the bank partners that sell insurance products of ICICI Prudential Life, HDFC Life and Max Life respectively.

Cobrapost, in its videos recordings, alleged the banks and their management's systematically and deliberately violated provisions of the Income-Tax Act, Foreign Exchange Management Act, RBI regulations, Know-Your-Customer (KYC) norms among others.

The portal also questioned the credentials of the insurance industry’s assets.

The Cobrapost film, titled 'Operation Red Spider', showed several mid-level staffers, such as relationship managers, branch managers and territory managers, offering to convert black money worth crores of rupees into white. Some even offered to deliver handsome returns, 'all in white'.

One of the most common methods offered by the staff across banks at different centres around the country, such as Faridabad, Delhi, Vellore and Hyderabad, was to invest the money in long-term insurance products. Here, the managers usually offered insurance products of the insurance partners of the bank.