New Delhi – Insurance Regulatory and Development Authority of India (IRDAI) has imposed a penalty of Rs 1.11 crore on Policybazaar and has also issued warning against violation of rules in future, news agency reported.
Policybazaar had failed in complying with the Regulations on Insurance Web Aggregator Regulations issued in 2013 and 2017, news agency quoting IRDAI said.
The rules were created to protect the interest of the policyholders and regulate the business of web aggregation.
IRDAI, in a gazette notification dated 13 April, laid down the rules for insurance web aggregators in IRDAI Regulations, 2017 to tackle the ambiguities.
Three changes to the rules are noteworthy like allowing all kinds of insurance products to be sold on the web aggregator’s portals. Earlier, unit linked insurance plans (Ulips) were not allowed.
Also, the ticket size of the policies that can be sold here has been increased from Rs 50,000 to Rs 1.5 lakh, giving a fillip to bundled life insurance policies and the rules now allow remuneration even on zero-commission policies, such as the online term plans, through rewards.
The regulator has directed the firm to deposit the penalty within 15 days from the receipt of the order, the news agency further reported.
“lf the web aggregator feels aggrieved by the above decision in this order, an appeal may be preferred to the Securities Appellate Tribunal as per Section 110 of the lnsurance Act, 1938,” News agency quoting the IRDAI order stated.
This comes nearly three months after the Delhi High Court fined Rs 10 lakh on Policybazaar for concealing facts to obtain a favourable order in a trademark infringement case filed by it against Acko.
The court ordered the firm to deposit Rs 5 lakh with the Prime Ministers Relief Fund and other Rs 5 lakh with Delhi Legal-Aid Services Authority.
Later, Acko approached the court saying the Policybazaar had concealed and distorted material facts, made misrepresentations and false statements before this court to obtain the ex-parte ad-interim injunction order.
The court said by concealment of this material fact, the Policybazaar had taken unfair advantage over the Acko and directed that the May 16 order of injunction should remain suspended till July 11, the next date of hearing.
