Insurance arm of Chola fined Rs 1 crore by regulator

Insurance regulator IRDAI on Tuesday fined Cholamandalam MS General Insurance Company (GIC) Rs 1 crore for various violations related to payment of commissions to brokers on sale of health insurance.

IRDAI said that the violations had occurred in 2015-16 in contravention to health insurance regulations, which state that commissions are not payable to intermediaries for polices that get ported. “The detail of commission recovery has not been provided by insurer. The violation was brought to the insurer’s notice during the on-site inspection, in the exit report shared with the insurer. The violation of insurer has been continued for 586 days from the date of bringing to its notice and for 2,001 days from the date of notifying the regulations, February 16, 2013 to November 1, 2018,” IRDAI said.

IRDAI said the 2013 regulations “clearly specify that no commission shall be payable to any intermediary on the acceptance of a ported policy”. IRDAI also told Cholamandalam GIC to recover the commission paid to intermediaries. And if the commissions weren’t recoverable, the amount should be paid from the company’s shareholders’ account.

Source: Times of India

Date: 23rd October 2019

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