Irda cancels licence renewal application of Willis

The Insurance Regulatory and Development Authority (Irda) has rejected an application by Willis India Insurance Brokers (WIIB) for renewal of its licence, as it has failed to follow regulations, which could be against the interest of policyholders.

"...The application of the broker (WIIB), seeking grant of renewal of licence that was earlier granted to them to carry out the functions as a Composite Insurance Broker, be rejected," Irda said in an order.

Willis India Insurance Brokers provides insurance broking and risk management services in India.

Irda further said that the broker has clearly failed to adhere to the applicable and relevant regulations while carrying out activities as an insurance broker and has acted in a manner prejudicial to the interests of policyholders.

Willis India Insurance Brokers is a joint venture between Baichand Amoluk Consultancy Services (BACSPL), with a majority shareholding of 74 per cent, and Willis Europe BV, with a shareholding of 26 per cent.

Willis India Insurance Brokers was given a licence in 2003 for three years, which was later extended till April 2, 2010.

In 2008, Irda had received a complaint from the Export Credit Guarantee Corporation of India alleging that the majority shareholder of the broker, BACSPL, had wrongfully withheld sums amounting to Rs 5.08 crore.

The broker was stated to have failed to maintain the 'insurance bank account' properly.

There existed a huge difference between the balances disclosed for 2007-08 and 2008-09 and the respective balances as reflected in the respective financial statements maintained by the broker, Irda said.

"These facts came into light only after the authority received the complaint from ECGC in this regard. Non- disclosure of material information in the application made to the regulator to obtain licence as an intermediary has to be viewed seriously," Irda added.