Irda slaps Rs 35.3 lakh fine on India Infoline Insurance

NEW DELHI: Insurance regulator Irda has imposed a total penalty of Rs 35.3 lakh on India Infoline Insurance Brokers Ltd for violating certain norms, including distance-marketing guidelines.

The regulator, which conducted an inspection of the broker during March 6-9, 2012, based on complaints against it, also approved the renewal of India Infoline Insurance's licence up to November 2014.

The Insurance Regulatory and Development Authority (Irda) penalised the broker for violating norms on free look cancellation of insurance policies and short premium payment by customers, among others.

Irda also fined the company for distributing free insurance to prospective customers, calling it "nothing but inducement."

"Employing 99 authorised verifiers, for soliciting or sale over distance mode who are not trained as required under Guidelines on Distance Marketing of Insurance Products...is a serious violation. A fine of Rs 25 lakh has been imposed for the said violation," Irda said.

High levels of free look cancellation, a facility for new insurance policy owners to terminate contracts without penalties such as surrender charges, have come down and were now relatively low as a percentage of total number of policies, Irda said.

"In view of the same, a penalty of Rs 5 lakhs has been imposed for the said violation," the regulator said.

It slapped a fine of Rs 5 lakh for distribution of free insurance policies. Besides, a penalty of Rs 30,000 was levied for late payment of annual fee for 2008-09, 2009-10 and 2010-11.

"Upon payment of the penalty imposed, the license of the broker be renewed from November 27, 2011, to November 26, 2014," Irda said.