Insurance Regulatory and Development Authority (Irda) on Monday rejected an appeal by SBI Life Insurance Company and ordered it to pay Rs 84.31 crore to its group insurance members/beneficiaries.
Irda asked the company to distribute wrongful payments of Rs 84.31 crore to the members/beneficiaries of respective group insurance policies. In October 2012, Irda had ordered SBI Life to distribute the wrongful payments made to some of its master policyholders.
In June 2008, an onsite inspection carried out at SBI Life found that the company had paid Rs 204.71 crore to 14 master policyholders flouting norms. In 2011, the regulator had levied on SBI Life a fine of Rs 70 lakh. In 2012, the regulator ordered the life insurer to distribute Rs 84.31 crore to the members/beneficiaries of the respective group insurance policies.
Irda had asked them to identify the members/beneficiaries as the case may be of each Master Policy against which the Life Insurer has reimbursed the administrative expenses as a percentage of premium.
Further, they had asked them to distribute the wrongful administrative charges paid, amongst the respective members/beneficiaries of each Master Policy by way of refund to the respective members/beneficiaries.
SBI Life had made a submission to the authority post this. However, Irda has said that they did not find any mitigating factors to consider either in the submissions made in the personal hearing or in the representation preferred under the Act and therefore the representation preferred under the Act is rejected and accordingly disposed off.
SBI Life has been directed to immediately implement the directions and submit a compliance report within thirty days from the date of this letter.