IRDAI member aiding graft, alleges tribunal

MUMBAI: In an unusually strong-worded order, the Securities Appellate Tribunal (SAT) has charged a member of the Insurance Regulatory and Development Authority of India (IRDAI) of “virtually aiding and abetting corruption”.

The strong words were used against member (nonlife) P J Joseph for disposing of a complaint of bribery without investigating the evidence. The order was issued by SAT presiding officer Justice J P Devadhar in an appeal filed by UK-based insurance broker Atkins Special Risks.

According to the order, Atkins provided reinsurance cover to Jagson International between 2002 and 2012 on a yearly brokerage/commission of 27.5%. Atkins complained that Jagdish Gupta, chairman of Jagson, had been demanding from Atkins a cut from the commission earned by them.


In the year 2012, the reinsurance business of Jagson was taken away from Atkins and given to Marsh India Insurance Brokers. Atkins had subsequently appointed an investigating firm to probe whether any bribe had been paid out.

The SAT order states, “Reports submitted by the firm confirmed that kickbacks were given to Gupta by Marsh for diverting the reinsurance business.” It added that in such a case, to hold that the appellant has not submitted any documentary proof would be totally false. “We fail to understand as to how member (non-life) could make such a statement in the impugned order. In our opinion, the impugned order passed by P J Joseph (non-life) virtually amounts to aiding and abetting corruption in the insurance business by the regulator, which cannot be tolerated.” The order went on to direct IRDAI to entrust the matter to a competent officer other than Joseph for passing a fresh order.

A spokesperson for the reinsurance broker Marsh India said, “At the outset, we wish to clarify that SAT has not passed any order against Marsh India. Further, the tribunal has categorically stated, ‘We make it clear that we have not expressed any opinion on the merits of the complaint filed by the appellant’.”

Incidentally Marsh India is the only IRDAI-regulated entity mentioned in the order. Jagson International, which is alleged to have received a bribe, is part of a group that had interests in aviation and offshore drilling. The spokesperson added, “We strongly deny any wrongdoing.”