Irda slaps Rs 5-lakh fine on Tata AIG

The Insurance Regulatory and Development Authority of India (Irda) today slapped Rs 5 lakh penalty on Tata AIG Life Insurance Co, as the company’s expenses of management for the financial year 2009-10 went beyond permissible limits.

The company’s expense of management was 117.28 per cent for the period under review, as against the permissible limit of 110 per cent under the Insurance Act, 1938.

Irda had earlier issued notice to Tata AIG, to which the insurance company had give an assurance to restrict such expenses and increase branch productivity.

“Contrary to the directions of the authority and assurances provided by the company to the authority, while requesting for approval to open new branches offices in the year 2009-10, Tata AIG has not complied with the limits on EoM under Rule 17D in the year 2009-10,” the Irda notice said.

The insurance regulator has asked the company to pay the penalty within 10 days.