IRDAI Levies Rs 3 Crore Penalty On Maruti Insurance Brokers
Insurance Regulatory and Development Authority of India has imposed a penalty of Rs 3 crore on Maruti lnsurance Brokers Pvt Ltd., the largest insurance broker in the country, for violation of various regulatory norms.
IRDAI has found MIBL violating Motor Insurance Service Provider guidelines on various counts, including the one related to empanelment of general insurers.
"It (MIBL) carries in its name, the name of the largest and the most popular car manufacturer in the country, that is associated with quality and reliability," said the IRDAI order.
Therefore, as the leader in the direct insurance broking segment, MIBL is the role model of insurance broking, which other broking companies seek to emulate, it said, and added this places tremendous responsibility on MIBL as it is held as the torch bearer of the broking profession.
"ln light of such expectations, MIBL was expected to act diligently and with utmost care and responsibility,” said the order while imposing Rs 3 crore penalty on the broker.
"Unfortunately, MIBL failed in complying with the MISP Guidelines which had been created to protect the interest of the policyholders and other stakeholders," it added.
IRDAI said it is in receipt of complaints/ representations from some general insurers stating that they are willing to enter into a service level agreement with MIBL based on transparent and objective criteria.
However, despite the insurance company having made many requests to MIBL for empanelling them, MIBL have neither responded nor empanelled them for selling motor insurance policies through their MISP's.
On this charge, MIBL in its reply to the IRDAI enclosed an affidavit duly authorised stating that the MISP guidelines are being complied with in full.
"MIBL in the same letter have furnished names of 13 general insurers on its panel who sell motor insurance policies as against a total of 25 general insurers doing motor insurance business," IRDAI said.
The regulator said MIBL admitted that MISP sponsored by them have offered discount on labour and interior cleaning, thereby inducing the customer and indulging in unfair business practice which restricts the choice of the policyholder to choose the insurer or insurance intermediary.
"By denying the facility of cashless claims to the policyholder, when the motor insurance policy is not purchased through MISP's sponsored by MIBL, the MISP is discriminating between policyholders," the order said.
IRDAI has also directed the MISP to "dismantle" panel of insurers and "empanel all insurers on platform", have full integration with insurers computer systems, ensure premiums quoted to customers come directly from insurer systems without any intervention by the broker.