New Delhi: Regulator Irdai has imposed a penalty of Rs 20 lakh on Birla Sun Life Insurance for violation of various regulations including the one relating to prohibition on giving freebies like foreign travel and gift cards to corporate agents and brokers.
The regulator imposed a penalty of Rs 5 lakh only for violation Corporate Agents guidelines by arranging foreign trips and distribution of gift cards to the employees of corporate agents and brokers.
Birla Sun Life Insurance accepted on providing gift cards, foreign trips to the employees of the corporate agents and brokers during 2011-12 amounting to Rs 3.80 crore. "Any payout to an employee of the corporate agent in relevance to solicitation is deemed to be a payment to the corporate agent himself or as an unlicensed individual encouraged to be involved in soliciting of insurance business," IRDAI said in an order.
Another charge was violation with regard to File & Use guidelines for which the regulator imposed a fine of Rs 5 lakh. The insurer also violated norms related to premium collection with regard to ULIP products thus inviting a fine of another Rs 5 lakh. "Regulation relating to advance premium was issued on June 20, 2013.
Insurer took more than a year to implement the Authority directions and that too only after the observation by the inspection team," it said. For engagement of business mentor, the regulator imposed a fine of Rs 5 lakh. "Further, insurer shall discontinue the practice of engaging a licensed entity as business mentor after March 31, 2017," it said.
The penalty of Rs 20 lakh shall be debited to the shareholders account of the life insurer and the amount shall be remitted to Insurance Regulatory and Development Authority of India within a period of 15 days from the date of receipt of this Order, it said.