SBI Life will have to pay a fine
The industry regulator IRDAI (Insurance Regulatory and Development Authority of India) has imposed a fine of Rs 1 crore on India’s leading insurance company SBI Life Insurance. This penalty has been imposed on this subsidiary of the country’s largest bank SBI for not following many insurance-related norms. Not only this, one of the reasons for imposing fines on the company is non-settlement of death claims.
IRDAI found in its investigation that when SBI Life Insurance entered into contracts with web aggregators to sell its products, many rules related to the insurance sector were violated. Not only this, the regulator also found that the insurance company refused to pay insurance claims of many people. This also includes death claims and in this regard, the IRDAI has also issued a notice to the company.
The company violated these rules.
The IRDAI investigation found that when the company signed contracts with web aggregators in the insurance sector such as Policy Bazaar, MIC Insurance, Compare Policy, Easy Policy and Wishfin, these aggregators were assigned responsibilities such as premium reminder and policy servicing assistant. But the details of these services were not adequately mentioned in these agreements.
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The insurance company paid Rs 1.93 crore for these services but did not provide any information about it. At the same time, those whom the company appointed as suppliers for this work (special case of payment to Extent Marketing and Technologies Pvt. Ltd.) did not have the infrastructure for it and they also outsourced this work and about 95 percent of the revenue was diverted. transferred to third parties.
Advice on resolving death claims
Apart from this, IRDAI has advised SBI Life Insurance to strictly follow the provisions of Section 45 of the Insurance Act, 1938. IRDAI found that SBI Life Insurance rejected around 21 insurance claims. The reason given for this was that the person died within 3 years of taking insurance, whereas this information was provided after the lapse of 3 years. On this, IRDA said that the company could not provide sufficient evidence in its support. In 17 other cases too, the company rejected the death claim because the date of death was within 3 years of taking the policy. In this regard, IRDA has asked the company to abide by Section 45.
