SAT stays Irdai's order suspending E-Meditek's registration

The Securities Appellate Tribunal (SAT) today stayed an Irdai order that suspended the registration of third-party administrator E-Meditek Insurance TPA.

In its order, the tribunal said Insurance Regulatory and Development Authority of India (Irdai) had passed the order without giving an opportunity of hearing to E-Meditek Insurance TPA.

"... we stay the operation of the impugned order forthwith with a direction to the member (non-life) to give an opportunity of hearing to the appellant (E-Meditek Insurance TPA) as expeditiously as possible and pass such order as he deems fit," the SAT said.

The insurance regulator on March 20, 2018, had suspended the registration certificate of E-Meditek Insurance TPA after it found "serious" violations of norms by the third party administrator.

The Irdai action had come on receipt of a whistle blower's complaint on September 4, 2017, following which the regulator's officials visited the office of E-Meditek Insurance TPA during November 13-17, 2017 and inspected its books of accounts.

After analysing the books of account, Irdai's member (non-life) found "serious" violations committed by E-Meditek Insurance TPA and by an order dated March 20, 2018 suspended certificate of registration granted to it by recording a finding that permitting it to continue activities as a third party administrator will have "adverse impact on the policyholders and insurers".

According to the SAT order, it is the case of E-Meditek Insurance TPA that in the present matter the whistle blower would be none other than Sunil Sharma, who was Vice President (Claims), against whom and several others, the firm had filed criminal case for defrauding the company even before the inspection by Irdai commenced.

"In these circumstances, assuming that there are some inconsistencies/ irregularities noticed in the accounts maintained by the appellant during the course of inspection the proper course for Irdai is to give an opportunity of hearing and pass appropriate order thereon," the SAT said.

It is made clear that pending further investigation it would be open to the member (non-life) to pass such order as he deems fit after hearing the appellant," it added.