New Delhi: Insurance regulator IRDA Monday imposed a fine of Rs 10 lakh on Tata AIA Life Insurance for violation of excess payment to corporate agents.
Besides, the regulator has also levied a fine of Rs 5 lakh on IndiaFirst Life Insurance for providing non-financial incentives to staff of corporate agent.
With regard to Tata AIA Life, the regulator said "it is also observed that the insurer was penalised for excess payouts to corporate agents in the financial year 2010-11 (order dated August 13, 2012) and in the financial year 2011-12 (order dated December 11, 2013)".
As such excess payouts observed in the 2012-13 is a repeated violation (considering the fact that no corrective action was taken by the insurer post penalty order dated August 13, 2012 for the violations of 2010-11), it added.
"The penalty of Rs 10 lakh shall be remitted within a period of 15 days from the date of receipt of this order by the insurer...," it said.
In the matter of IndiaFirst Life Insurance, it said, insurer submissions were not acceptable as "Clause 21 of Corporate Agents guidelines prohibit insurer to pay the corporate agent or incur expenses towards them other than towards co-branding advertisements (apart from permitted agency commission)."
Besides, non-financial incentive given to the staff of the corporate agent is accounted as under the head commission which in violation of norms, it said.
"Having regard to the facts of the case and the gravity of the violations committed by the insurer, the authority in exercise of powers vested in it under section 102 of the Act, imposes a penalty of Rs 5 lakh for the above violation," it said.
