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Irdai slaps Rs 51 lakh fine on four insurers for violation of norms

Regulator Irdai has imposed a penalty of Rs 51 lakh on four insurers, including SBI General Insurance Company, for violation of certain norms related to motor insurance.

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IRDAI | Insurance

Press Trust of India  |  New Delhi 

Lower fines, but more powers to assessing officers

Regulator has imposed a penalty of Rs 51 lakh on four insurers, including SBI General Company, for violation of certain norms related to motor

A penalty of Rs 25 lakh has been imposed on SBI General Company for not fulfilling regulatory obligations under the Motor Third Party (MTP) business.

The Insurance Regulatory and Development Authority of India (Irdai) has also imposed a penalty of Rs 13 lakh on Liberty General Insurance Limited, Rs 10 lakh penalty on Bajaj Allianz General Insurance Company, and Rs 3 lakh on Royal Sundaram General Insurance Company.

In the order on SBI General Insurance Company, said the charge was that the the insurer did not comply with the MTP Obligation for the financial year 2017-18 calculated as per Regulation 3 of the (Obligation of Insurer in respect of Motor Third Party Insurance Business) Regulations, 2015.

"For the financial year 2017-18, the insurer did not fulfill the obligation and had a shortfall of Rs.104.6 crores (24.08 per cent), which amounts to non-compliance of Regulation 3 of Irdai (Obligation of Insurer in respect of Motor Third Party Insurance Business) Regulations, 2015," the order said.

It further said the insurer had not fulfilled the MTP obligations during the immediate previous financial year 2016-17 with a significant shortfall of Rs 146 crores (38.59 per cent).

"Taking into consideration the repetitive nature of violation, magnitude of violation, and the submissions of the insurer that they are committed and are entering into various tie-ups to fulfill the MTP obligation, the Authority...hereby imposes a penalty of Rs 25 lakh," the order said.

As per the order on Liberty General Insurance Limited, the penalty of Rs 13 has been imposed for violation of certain provisions of Guidelines on Motor Insurance Service Provider (MISP Guidelines). The insurer was also directed to ensure in future that any engagement with automotive dealers is strictly in compliance with MISP Guidelines.

The penalty of Rs 10 lakh has been imposed on Bajaj Allianz General Insurance Company for violation of certain provisions of Insurance Act, 1938.

In case of Royal Sundaram General Insurance, Irdai order said the insurer was in violation of a provision MISP Guidelines while imposing the penalty of Rs 3 lakh.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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First Published: Sun, April 18 2021. 15:47 IST
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