Irdai slaps Rs 20 lakh penalties on ICICI Prudential

Insurance regulator Irdai today slapped a penalty of Rs 20 lakh on ICICI Prudential Life for certain activities the largest private sector life insurer undertook in the past "in sheer violation" of regulatory norms.
"While a penalty of Rs 5,00,000 has been imposed on the insurer for sponsoring foreign trips for corporate agents in violation of regulatory norms, another Rs 5,00,000 penalty has been imposed on it for payouts made by it to group master policy holders (MPHs) in the name of marketing support fee for displaying its products in their premises in violation of norms," the regulator said a statement.

Similarly, the company has also been asked to pay Rs 10,00,000 penalty for arranging foreign trips to its corporate agents and employees of brokers under rewards and recognition programmes in violation of the regulatory norms.
The insurer had floated various sales campaigns under their rewards and recognition programmes to the employees other than specified persons of corporate agents also. Apart from the contests mentioned above, the insurer had arranged foreign trips to the employees of the corporate agents and incurred huge amounts towards the said trips, the regulator has found.
The regulator observed that arranging foreign trips and distribution of gift cards to employees of corporate agents directly by the insurer amounts to offering incentives to corporate agents and the same is in "gross violation" of Clause 21 of 2005 licensing guideliens of corporate agents.