[xls] · web viewclause c-7 of group insurance guidelines no.015 /irda/ life/ circular/gi...

0000001

Sn Order_pdf_file_id Order_type(final/interim)Order_date1 Final 10-03-162 Final 10-03-163 Final 22-03-16

Final 22-03-16Final 22-03-16Final 22-03-16Final 22-03-16Final 22-03-16Final 22-03-16Final 22-03-16

4 Final 22-03-16Final 22-03-16Final 22-03-16Final 22-03-16Final 22-03-16Final 22-03-16Final 22-03-16Final 22-03-16Final 22-03-16Final 22-03-16

5 Final 13-04-16Final 13-04-16Final 13-04-16Final 13-04-16Final 13-04-16Final 13-04-16Final 13-04-16Final 13-04-16Final 13-04-16

6 Final 15-04-16Final 15-04-16Final 15-04-16Final 15-04-16Final 15-04-16Final 15-04-16Final 15-04-16Final 15-04-16Final 15-04-16Final 15-04-16Final 15-04-16Final 15-04-16Final 15-04-16

7 Final 06-05-16Final 06-05-16Final 06-05-16

IRDAI/F&A/EoM/ORD/205/03/2016IRDAI/F&A/EoM/ORD/204/03/2016IRDA/ENF/MISC/ONS/053/03/2016IRDA/ENF/MISC/ONS/053/03/2016IRDA/ENF/MISC/ONS/053/03/2016IRDA/ENF/MISC/ONS/053/03/2016IRDA/ENF/MISC/ONS/053/03/2016IRDA/ENF/MISC/ONS/053/03/2016IRDA/ENF/MISC/ONS/053/03/2016IRDA/ENF/MISC/ONS/053/03/2016IRDA/ENF/MISC/ONS/052/03/2016IRDA/ENF/MISC/ONS/052/03/2016IRDA/ENF/MISC/ONS/052/03/2016IRDA/ENF/MISC/ONS/052/03/2016IRDA/ENF/MISC/ONS/052/03/2016IRDA/ENF/MISC/ONS/052/03/2016IRDA/ENF/MISC/ONS/052/03/2016IRDA/ENF/MISC/ONS/052/03/2016IRDA/ENF/MISC/ONS/052/03/2016IRDA/ENF/MISC/ONS/052/03/2016IRDA/ENF/MISC/ONS/074/04/2016IRDA/ENF/MISC/ONS/074/04/2016IRDA/ENF/MISC/ONS/074/04/2016IRDA/ENF/MISC/ONS/074/04/2016IRDA/ENF/MISC/ONS/074/04/2016IRDA/ENF/MISC/ONS/074/04/2016IRDA/ENF/MISC/ONS/074/04/2016IRDA/ENF/MISC/ONS/074/04/2016IRDA/ENF/MISC/ONS/074/04/2016IRDA/ENF/MISC/ONS/075/04/2016IRDA/ENF/MISC/ONS/075/04/2016IRDA/ENF/MISC/ONS/075/04/2016IRDA/ENF/MISC/ONS/075/04/2016IRDA/ENF/MISC/ONS/075/04/2016IRDA/ENF/MISC/ONS/075/04/2016IRDA/ENF/MISC/ONS/075/04/2016IRDA/ENF/MISC/ONS/075/04/2016IRDA/ENF/MISC/ONS/075/04/2016IRDA/ENF/MISC/ONS/075/04/2016IRDA/ENF/MISC/ONS/075/04/2016IRDA/ENF/MISC/ONS/075/04/2016IRDA/ENF/MISC/ONS/075/04/2016IRDA/ENF/MISC/ONS/88/05/2016IRDA/ENF/MISC/ONS/88/05/2016IRDA/ENF/MISC/ONS/88/05/2016

0000002

Accused_entity Colluding_agencies Date_of_onsite_inspectionNANANA 08/10/2012 – 17/10/2012NANANANANANANANA 31/07/2012 – 9/08/2012NANANANANANANANANANA 4/02/2013 – 15/02/2013NANANANANANANANANA 09/07/2012 – 18/07/2012NANANANANANANANANANANANANA 19/08/2013 – 27/08/2013NANA

Future Generali India Life Insurance Company LimitedTata AIA Life Insurance Company LimitedM/s. Exide Life Insurance Company LimitedM/s. Exide Life Insurance Company LimitedM/s. Exide Life Insurance Company LimitedM/s. Exide Life Insurance Company LimitedM/s. Exide Life Insurance Company LimitedM/s. Exide Life Insurance Company LimitedM/s. Exide Life Insurance Company LimitedM/s. Exide Life Insurance Company LimitedM/s. Star Union Dai-ichi Life Insurance Company LimitedM/s. Star Union Dai-ichi Life Insurance Company LimitedM/s. Star Union Dai-ichi Life Insurance Company LimitedM/s. Star Union Dai-ichi Life Insurance Company LimitedM/s. Star Union Dai-ichi Life Insurance Company LimitedM/s. Star Union Dai-ichi Life Insurance Company LimitedM/s. Star Union Dai-ichi Life Insurance Company LimitedM/s. Star Union Dai-ichi Life Insurance Company LimitedM/s. Star Union Dai-ichi Life Insurance Company LimitedM/s. Star Union Dai-ichi Life Insurance Company LimitedM/s. Bharti AXA Life Insurance Company LimitedM/s. Bharti AXA Life Insurance Company LimitedM/s. Bharti AXA Life Insurance Company LimitedM/s. Bharti AXA Life Insurance Company LimitedM/s. Bharti AXA Life Insurance Company LimitedM/s. Bharti AXA Life Insurance Company LimitedM/s. Bharti AXA Life Insurance Company LimitedM/s. Bharti AXA Life Insurance Company LimitedM/s. Bharti AXA Life Insurance Company LimitedM/s. DHFL Pramerica Life Insurance Company LimitedM/s. DHFL Pramerica Life Insurance Company LimitedM/s. DHFL Pramerica Life Insurance Company LimitedM/s. DHFL Pramerica Life Insurance Company LimitedM/s. DHFL Pramerica Life Insurance Company LimitedM/s. DHFL Pramerica Life Insurance Company LimitedM/s. DHFL Pramerica Life Insurance Company LimitedM/s. DHFL Pramerica Life Insurance Company LimitedM/s. DHFL Pramerica Life Insurance Company LimitedM/s. DHFL Pramerica Life Insurance Company LimitedM/s. DHFL Pramerica Life Insurance Company LimitedM/s. DHFL Pramerica Life Insurance Company LimitedM/s. DHFL Pramerica Life Insurance Company Limited

M/s. Kotak Mahindra Old Mutual Life Insurance Company Limited



0000003

Date_of_first_communication Date_of_first_Response Show_cause_notiDate_of Reply_t12-12-13 24-12-13 18-11-15 14-12-1512-02-14 10-03-14 18-11-15 09-12-1530-05-13 24-06-13 28-10-15 30-11-1530-05-13 24-06-13 28-10-15 30-11-1530-05-13 24-06-13 28-10-15 30-11-1530-05-13 24-06-13 28-10-15 30-11-1530-05-13 24-06-13 28-10-15 30-11-1530-05-13 24-06-13 28-10-15 30-11-1530-05-13 24-06-13 28-10-15 30-11-1530-05-13 24-06-13 28-10-15 30-11-1530-10-12 06-12-12 22-12-15 11-01-1630-10-12 06-12-12 22-12-15 11-01-1630-10-12 06-12-12 22-12-15 11-01-1630-10-12 06-12-12 22-12-15 11-01-1630-10-12 06-12-12 22-12-15 11-01-1630-10-12 06-12-12 22-12-15 11-01-1630-10-12 06-12-12 22-12-15 11-01-1630-10-12 06-12-12 22-12-15 11-01-1630-10-12 06-12-12 22-12-15 11-01-1630-10-12 06-12-12 22-12-15 11-01-1613-05-13 07-06-13 22-01-16 18-02-1613-05-13 07-06-13 22-01-16 18-02-1613-05-13 07-06-13 22-01-16 18-02-1613-05-13 07-06-13 22-01-16 18-02-1613-05-13 07-06-13 22-01-16 18-02-1613-05-13 07-06-13 22-01-16 18-02-1613-05-13 07-06-13 22-01-16 18-02-1613-05-13 07-06-13 22-01-16 18-02-1613-05-13 07-06-13 22-01-16 18-02-1631-10-12 30-11-12 25-01-16 26-02-1631-10-12 30-11-12 25-01-16 26-02-1631-10-12 30-11-12 25-01-16 26-02-1631-10-12 30-11-12 25-01-16 26-02-1631-10-12 30-11-12 25-01-16 26-02-1631-10-12 30-11-12 25-01-16 26-02-1631-10-12 30-11-12 25-01-16 26-02-1631-10-12 30-11-12 25-01-16 26-02-1631-10-12 30-11-12 25-01-16 26-02-1631-10-12 30-11-12 25-01-16 26-02-1631-10-12 30-11-12 25-01-16 26-02-1631-10-12 30-11-12 25-01-16 26-02-1631-10-12 30-11-12 25-01-16 26-02-1630-09-13 20-10-13 22-01-16 15-02-1630-09-13 20-10-13 22-01-16 15-02-1630-09-13 20-10-13 22-01-16 15-02-16

0000004

Date_of_personaCharge N Charge_Heading1 Non-compliance with the Expenses on management1 Non-compliance with the Expenses on management

15-02-16 1 Repudiation due to non-disclosure2 Risk commencement before receipt of premium3 waiver of suicide clause4 Settlement in the favour of Master Policyholder5 Issues in solicitation of business by corporate agents6 Transfer of premium to shareholders' fund7 Monitoring of liquid mutual fund at controlled fund level8 Exceed in limit set for investment in ABS's

09-02-16 1 Risk commencement before receipt of premium2 Delay in application of NAV for the Top up premiums received3 Risk commencement before receipt of premium4 Payouts made to Master PolicyHolders5 Settlement in the favour of Master Policyholder6 Payouts made to Corporate Agents7 Banks acting as Referal Provides8 Delay by the coroporate agent in remmitting deposits to life insurers account an9 Issues with valuation software used to value monthly income benefits

10 Issues in solicitation of business by corporate agents23-03-16 1 Use of servers located abroad for data storage

2 Undertaking being taken during submission of non-standard age proof3 Delay in issue of policy bonds4 Delay in settlement of claims5 Wrongful calculation of interest payable on claims in case of a delay6 Payouts made to Group Policyholders7 Issues regarding the nature of lease8 Agreements with related parties of brokers9 Use of investment strategies different from as recommended and excessive ded

30-03-16 1 Inadequate systems for communication with policy holders2 Improper classifcation of jurisdiction for the policies issued3 Delay in settlement of Free Look Cancellations4 Cancellations made beyond permissible limits and for reasons other than specifi5 Repudiation of claims based on unauthenticated documentation6 Payouts made to Master PolicyHolders7 Issues in solicitation of business8 Outsourcing agreements made with entities of individual agents9 Agreements with related parties of corporate agents

10 Misleading Advertisements11 Inadequate mechanism to ensure adherence of norms in collection of premium12 waiver of license fee given to applicants for individual agents13 Individual agent acting as CIE for a corporate agent without a certificate

28-03-16 1 Issues regarding the nature of product sold2 Issue with regard to deduction from policyholders and transfer of commission to3 Waiver of service tax given to policyholders

0000005

Charge_description Regulation_violatedSection 40B of the Insuranc

The insurer was non-compliant with the prescribed expenses Section 40B of the InsurancRepudiation of claims on the grounds of non disclosure in DecFile and use guidelines

64VB (1) of the Insurance LFile and use guidelines

file and use procedures

File and Use Procedures

The insurer was non-compliant with the prescribed expenses on management limits. The EoM ratio of the insurer was 137.05% and 157.15% for the year 2013-14 and 2014-15 respectively

(a) Risk commenced before receipt of premium for the group policy issued (b) The insurer had offered Unit Linked Group Gratuity Scheme to various master policyholders, and addition of members was done during the years 2010-11 and 2011-12. The insurer had not collected risk charges, as and when members were added, but for showing the amount as receivable (net of premiums refundable for deleted members) (c) On scrutiny of death claims under Group policy it is found that the risks cover commenced before receipt of premium

Under the group product “ING Vysya Group Gratuity Plan (UIN 114L017V02), in the case of ING Life Insurance Group Gratuity Trust, besides waiving all the applicable charges, suicide clause was also waived from policy conditionsDeath claims were settled in favour of Master Policyholders (MPH) under non-employer/employee group policies

Clause C-7 of Group Insurance Guidelines No.015 /IRDA/ Life/ Circular/GI Guidelines/2005 dated 14/07/2005

Business sourced by Corporate Agents revealed that (a) Only few specified persons logged in business in huge numbers from different places (b) Huge number of proposals sourced from different places by a specified person (SP), but the signature of the specified person on different proposals is not the same

Regulation 9(2)(ii) (a), (l) (m) of IRDA (Licensing of Corporate Agents) Regulations (b) Clause 2,8,17 of Guidelines on Licensing of Corporate Agents, 2005 and (c) IRDA Circular No. IRDA/CIR/010/2003 dated 27.03.2003

During any calendar month, the premiums received with respect to non-linked policies were transferred to shareholders’ fund. At the end of each month, after receipt of actuarial liability requirements and in case of deficit, securities are transferred from shareholders’ fund to respective policyholders’ fund. Thus, any income derived on such premium receipts during any calendar month are credited to the shareholders’ fund without any part of the same being allocated to policyholders

Section 10(2) and (3) and Section 11(1), 1(A) and 1(B) of the Insurance Act, 1938 and IRDA (Preparation of Financial Statements and Auditor’s Report of Insurance Companies) Regulations, 2002

As per the Investment System (MFUND), the regulatory limits of investments in liquid mutual funds were monitored at Controlled fund instead of individual fund Level

Para 5B (i) and 5B (ii) of Annexure II of IRDA’s (Investments) (Fourth Amendment) Regulations, 2008

In case of ACE LIFE Fund which was a part of controlled fund, it was observed that the investments in Asset Backed Securities (ABS) exceeded 10% of the fund

Para 6(2) of Annexure II of IRDA (Investment) (4th Amendment) Regulations, 2008

Risks were covered without having collected adequate insurance premium from the policy holders. Shortage in premium of more than Rs.1000/- was allowed by debiting Operating expenses under several policies issued. It was also observed that a shortage to the extent of Rs.1.54 Lakh under a policy was allowed

Section 41 and 64VB (1) of Insurance Act, 1938The Life Insurer has been taking the date of receipt of the

request instead of date of receipt of premium

Point 10.6.1 of ULIP Guidelines, 32/IRDA/ACTL/Dec-2005 dated 21.12.2005Under a group policy issued commencement of risk is prior

to the date of receipt of full premium64VB (1) of Insurance Act, 1938

Payouts are made to Master Policyholders (MPH), in the name of reimbursement of the expenses for publicity activities

Clause C-4 of Group Insurance Guidelines 015/IRDA/Life/Circular/GI Guidelines/2005 dated 14/07/2005Under Non-Employer-Employee Group policy, Death claims

are settled in favour of Group Master Policy Holder

Clause C-7 of Group Insurance Guidelines, 015/ IRDA / Life / Circular / GI Guidelines/2005 dated 14/07/2005

Agreements with various Corporate Agents (Bank) were entered and considerable payouts are made to the Corporate Agents in the name of “Co-branding expenses” during 2010-11 and 2011-12 respectively

Clause 21 of Corporate Agency Guidelines, 017/IRDA/Circular/CA Guidelines/2005 dated 14/07/2005

The Life Insurer projected some banks were “Referal Provides”, whose services were terminated and the corporate agency licence was yet to be granted as intermediaries. They were not licensed to solicit insurance business but they issued advertisement which indicated that products of the company were available with them

Circular No. IRDA/CIR/010/2003 dated 27.03.2003

One of the Corporate Agents (CA) has not ensured that the deposit received from the policy holder is remitted to the Life Insurer within 24 hours under a sample case. It was also found that there was a delay of four months in processing the proposal form. Even after four months, the Life Insurer has raised some requirements

Section 64VB (4) of Insurance Act, 1938 and Regulation4 (6) of IRDA (Protection of Policyholders’ Interests) Regulations, 2002 (PPI Regulations)

Valuation of products with monthly income benefits revealed that the valuation software did not allow for any future expenses associated with the payment of monthly benefits, however the pricing of the products factored such expenses and Actuarial Valuation mechanism revealed that (a) The valuation program was run with valuation bases without Margin for Adverse Deviation (MAD) for determining negative reserves, surrenders value deficiency reserves and paid up value minimum reserves. (b) No assumptions were made on premium related expenses with respect of valuation of linked and non linked products (c) Linked contracts were valued without taking into account MADs

IRDA (ALSM) Regulations, 2000 and Regulation 4-3-(d) of IRDA (Actuarial Report and Abstract) Regulations, 2000

Though the Corporate Agents (Banks’) branches are more than a few hundreds, they have only one/two specified persons and huge volume of business was solicited. This inconsistency (no. of specified persons vis-a-vis volume of business) indicates that the CAs are soliciting business in the absence of specified persons

Regulation 9(ii)(a) of IRDAI (Licensing of Corporate Agents) Regulations, 2002 and IRDAI circular no. IRDA/CIR/010/2003 dated 27.03.2003

The Life Insurer is using RLS applications for their core life policy administration system, RLS application system is provided by the Axa Asia Pacific holdings limited, this system’s main database server presently located in Singapore SingTel DC. Thus, policy wise details of all policy holders are sent to the main server located in Singapore SingTel DC. Also, in case of their Channel management system (RCMS Application) and Financial system – RGL, both application main server and back up servers are at Singapore SingTel DC and Germany DC respectively.

Regulation 7(c) of IRDA (Registration of Indian Insurance Companies) Regulations, 2000 and Clause 9.8 of Outsourcing Guidelines Circular No IRDA/ LIFE/ CIR/ GLD/ 013/02/2011 dated 01/02/2011

When a policy is completed with Non-Standard Age proof, a consent letter is being taken which contains an undertaking by the insured that, he would not approach the insurer to revise the age and premium even if he is able to produce a standard age proof at a later date and would continue to pay the extra throughout the term of the policy

Section 45 of Insurance Act, 1938 and Regulation 6(4) of IRDA (Protection of Policyholders’ Interests) Regulations, 2002.

The policy bonds along with proposal forms were not issued within 30 days from the underwriting decision date in a considerable number of policies issued during 2011-12

Regulation 4 of IRDA (Protection of Policyholders’ Interests) Regulations, 2002

In 480 policies, though there was no requirement pending before date of maturity, it was not ensured that the maturity claims are settled on or before maturity date. Also, only 89 of the total 480 cheques issued on maturity proceedings were encashed by the policyholders

Clause 6 of Annexure II of Corporate Governance Guidelines, IRDA/F&A/CIR/025/2009-10 dated 05/08/2009 and Regulation 8 of IRDA (Protection of Policyholders’ Interests) Regulations, 2002

The Life Insurer has adopted the calculation of interest payable on the delayed claims by calculating the number of days delayed in settlement starting from the 31st day of receipt of last requirement instead of calculating the number of days delay in settlement from the date of receipt of last requirement

Regulation 8(5) of IRDA (Protection of Policyholders’ Interests) Regulations, 2002

Amounts have been paid to Group Policyholders (GPH) in the name of “Market Research”, “Sales Training”, “Display of publicity material” etc

Clause B-2 and C-4 of Group Insurance Guidelines, Circular No.015/IRDA/Life/Circular/GI Guidelines/2005 dated 14/07/2005A leasing agreement entered with an entity is considered as

Operating Lease instead of Financial Lease

Regulation 2(e) of IRDA (Assets Liabilities and Solvency Margin of Insurers) Regulations, 2000 and Regulation 3(1) read with Clause 1 of Schedule A (Part 1) of IRDA (Preparation of Financial Statements and Auditor’s Report of Insurance Companies) Regulations, 2002 (Accounting Standard 19 prescribed by ICAI)

Agreements were entered with related parties of the Brokers and payouts are made in the name of Sending mailers, imparting training to sales staff and Advertisements etc

Regulation 19 of IRDA (Insurance Brokers) Regulations, 2002

Under the Life Insurer’s ULIP product ‘Bharti AXA Life True Wealth’ (UIN-130L036V01), premiums are invested in ‘True Wealth Fund’, which provides highest unit price recorded during the tracking period before policy maturity. CPPI method was used for determining investment strategy for the fund on daily basis. . But the life insurer is taking a view different from the respective software recommended investment pattern. Hence, as the insurer is not taking necessary exposure to the equities and investment pattern is based on decision of the Investment Manager, levy of guarantee charge (0.35% p.a. of the fund) while investing more than the CPPI algorithm recommended proportion of the fund in debt securities is not reasonable and on examination of the procedure adopted by the life insurer in declaring the interest to be credited to the policyholders’ account value, under ‘Bachat Bima’ product, it was observed that the Life Insurer is deducting 0.5% p.a. in addition to maximum allowable deduction towards account management charge of 2.75% p.a.There were no systems and mechanism in place to communicate in writing, the decision of the Life insurer on the proposals received within prescribed time lines

Regulation 4(6) of IRDA (Protection of Policyholders’ Interests) Regulations, 2002

On examination of the data pertaining to 2011-12 of rural policies issued, it was noticed that the insurer did not put in place a proper system to classify the proposals as “Rural”

Regulation 3 of IRDA (Obligations of Insurers to Rural and Social Sectors) Regulations, 2002

There is a considerable delay in settlement of Free Look Cancellations (FLC) requests. Lack of systems of recording the dates of dispatch of policy bonds and controls on date of receipt at policy holder lead to delay in payments

Regulation 8 (5) of IRDA (Protection of Policyholders’ Interests) Regulations, 2002 and Clause 6 of Annexure II of Corporate Governance Guidelines, IRDA/F&A/CIR/025/2009-10 dated 05/08/2009

On verification of cancelled policies under Free Look Cancellations (FLCs), it was found that Cancellations were allowed beyond permissible time limits and the grounds for the cancellations were also other than permissible reasons. Circumstantial compulsions were the basis for FLCs under some policies

Regulation 6(2) of IRDA (Protection of Policyholders’ Interests) Regulations, 2002 and Clause 6 of Annexure II of Corporate Governance Guidelines

Claims are repudiated based on unauthenticated documentation. A communication is being sent to the claimant informing the closure of the claim under “inadequate documentation” without obtaining conclusive evidence to back up the repudiated decision. However a tag line is added to the communication that the same would be reopened as and when the “called for” documents are submitted. It was also observed that Good number of claims is outstanding with the Life Insurer ageing above 180 days from the date of intimation by the claimant

Regulation 8 of IRDA (Protection of Policyholders’ Interests) Regulations, 2002Agreement was entered with Group Master Policyholder

(MPH) for data processing services and payouts were made

Clause B-2 and C-4 of Guidelines on Group Insurance Circular No.015/IRDA/Life/Circular/GI Guidelines/2005 dated 14/07/2005

The Life insurer is engaging in the services of unlicensed entities in soliciting / procuring insurance business. On examination of sample cases, it was found that the proposals contain the names of various entities as “Sales Person / Channel Partner”. And in all these cases, the Agent/ Sales Person’s Report was signed by the employees of the insurer. In some cases, the identity of signatory to Sales Person’s Report was not mentioned. This indicates that all the proposals solicited by these sales employees have been solicited by unlicensed individuals/entitites. Also, business was solicited by the entity's village level entreprenuers and they were remunerated as well. Also, Insurance business was not solicited by the Specified Persons (Sps) of Corporate Agent. Also, different codes for different locations of operation of corporate agents were alloted. CA is operating from 508 locations, while it has only 69 Sps and only one SP is signing all the SP reports. Licenses of a few SPs expired in 2010 and a CA had no licensed SP on its roll. In all the proposals, the sales person's report was given by only one specified person og the CA irrespective of the location of the proponent/location of the corporate agent's branch. The signatures of the specified person are varying in all the proposals. Large number of proposals contain a unique code number on the proposal form, which indicates that the CA is indulging either in employing sub-agents, finders or following a chain marketing system

Section 40(1) of Insurance Act, 1938, IRDA Circular No. IRDA/ CIR/ 010/2003 dated 27/03/2003, IRDA/CAGTS/CIR/LCE/082/05/2010 dated 07/05/2010 and Regulation 9(2)(ii)(a) of the IRDA (Corporate Agency) Regulations, 2002

Outsourcing Agreements were entered with entities owned/related to individual agents and extra payouts were made under this guise

Section 40A (1) of Insurance Act, 1938 and Clause 8.5 of Outsourcing Guidelines, IRDA/LIFE/CIR/GLD/013/02/2011 dated 01/2/2011

The Life Insurer entered into agreements with the related parties of the Corporate Agents for obtaining services and making payment to those entities. It is evident from the schedules of the agreements that the scopes of services to be rendered by the service provider are those to be discharged by the Corporate Agents

Clause 21 of Corporate Agency Guidelines, No.17/IRDA/Circular/CA Guidelines/2005 dated 14/07/2005 and clause 8.5 of Outsourcing Guidelines, IRDA/LIFE/CIR/GLD/013/02/2011 dated 01/2/2011

The Life insurer has filed a product advertisement for product “Dhan Suraksha” in (8) languages, which illustrate the product features of the said product, also mentioned an entity’s name (an outsourced entity) indicating it as an intermediary by the statement “For further details on the product please consult the entity.....”

Regulation 2(d) of IRDA (Insurance Advertisements and Disclosures) Regulations, 2000

There is no mechanism put in place to ensure adherence to Section 64VB (4) of Insurance Act, 1938 with regard to premium collection by Corporate Agents/Brokers/Direct Sales Employees. The Corporate Agents / Brokers / Direct Employees are collecting the proposal deposits and signed proposals from the customers, and are in practice of remitting the same to the Life insurer, by way of depositing in Life insurer’s designated bank account, depositing with CMS Agent or by depositing in the Life Insurer’s branch office

Section 64VB (4) of Insurance Act, 1938

The Life Insurer is not in practice of collecting the license fee of Rs. 250/- from the individuals who made applications for grant of license to act as an individual agent. However, the amount of license fee is funded by the Life Insurer, by debiting the operating expenses, though the applicant is making a declaration in application Form –VA, stating that he had remitted the required license fee

Regulation 3 (1) (b) 7 of IRDA (Licensing of Insurance Agents) Regulations, 2000

It was noticed that the Life Insurer had named an individual (holding a license as individual agent) as Corporate Insurance Executive (CIE) of a Corporate Agent of the Life Insurer without issuing any certificate to act as CIE on behalf of the Corporate Agent at the time of grant of license to the Corporate Agent, on his transfer from an individual agent to CIE of Corporate Agent. Even after expiry of license of the individual agent, the Life Insurer has failed to get fresh certificate as CIE. Since then, the referred Corporate Agent is operating without a Corporate Insurance Executive on its rolls. Even the corporate agent did not have any other Specified Person to solicit insurance business. Similarly in case of another Corporate Agent, the certificate granted to an individual as CIE, got expired on 29.07.2010. A new CIE was appointed and a certificate was granted to another individual on 27.04.2012. It was noticed that the Corporate Agent was operating without a CIE during the period 29.07.2010 to 27.04.2012. The business was solicited by the Corporate Agent during the period even without a single Specified Person

Regulation 9(2)(ii)(a) as CIE in extant case is not holding valid certificate issued in accordance with Form IRDA-Corporate Agents-L-2 prescribed under IRDA (Licensing of Corporate Agents) Regulations

The Life Insurer sold a good number of new policies during 2011-12 and 2012-13 in respect of ‘Accumulated with Profit’ type of contracts such as Kotak Child Advantage Plan, which are similar to Variable Insurance Products (VIP)

Circular No. IRDA/ACTL/CIR/VIP/187/11/2010 dated 23/11/2010

In case of Accumulated with profit products, the Life Insurer had reduced the first year commission rates from 40% to 35%. It was observed that the insurer deducted charges from individual policyholders’ accounts at the previous rate of 40% rather than 35% of the first year premium and agents were paid commission at the rate of 35%

In respect of group policies, the Life Insurer funded a considerable sum against differential amount for service tax for the year 2012-13 instead of collecting the same from the group policyholders. The entire amount was paid by the Life Insurer by debiting the policyholders’ account

Section 41 and Section 64VB of Insurance Act, 1938

0000006

Violation_amount Violation_description Guilty(Y/N) Penalty(amt.) Other_actionNA Y Nil Issue of warningNA Y Nil Issue of warningNA DoH is not required as per theY 500000 Further orders to re-examine such casesNA Y Nil Issue of warningNA Y Nil Issue of warningNA Y 100000 Further orders issued to dicontinue the practiceNA Sales practices of the corpora Y 500000 Further isssue of orderNA N NilNA N Nil No charges pressed furNA N Nil No charges pressed furNA N NilNA N Nil No charges pressed furNA N Nil No charges pressed fur4.32 lakhs The life insurer undertook ex Y Nil Issue of warningNA The life insurer argued that mY 100000NA Y Nil Issue of warningNA Y Nil Issue of warningNA Y Nil Issue of warningNA N Nil No chargespressed furtherNA N Nil No charges pressed furNA As per the given regulations, N NilNA The insurer had entered the giN Nil No charges pressed furNA N Nil No charges pressed furNA Proper documents were not recN Nil No charges were pressedNA N Nil No charges pressed furNA Y 500000 The life insurer has beNA N Nil No charges pressed furNA N Nil No charges pressed furNA N Nil No charges pressed furNA N Nil No charges pressed furNA N Nil No charges pressed furNA N Nil No charges pressed furNA N Nil No charges pressed furNA N Nil No charges pressed fur16.29 Lakhs Y Nil Issue of warningNA Y Nil Issue of warningNA Y 500000 Issue of warningNA Y 500000NA Y Nil Issue of warningNA N Nil No charges pressed further but the life insurer 5.47 lakhs Y Nil Issue of warningNA Y 500000NA Y Nil Issue of warningNA N Nil No charges pressed furtNA Y Nil Issue of warning

The relevant guidelines specify that the Master Policy Holder shall only be a facilitator in claims settlement but the claim be paid in favour of beneficiary/member only. The Life Insurer has violated the provisions of the guidelines referred herein

Further order has been issued to ensure that the investment account referred in the process note shall form part of Policyholders’ fund (since the premium collections are belonging to policy holders) while ensuring timely transfer of funds from the account to respective policy holders funds

No charges have been pressed against the insurer. However, orders have been issued for it to ensure strict compliance of the extant regulatory norms relating to premium payments

The Life Insurer did not have systems in place to ascertain the purpose before accepting any premium/deposit from the policy holders. The insurer applied the date of request instead of date of receipt for top up premiumpayouts made towards advertisements, publicity costs and co-branding activities were 1% of the total premium procured during 2010-11 and 2011-12

The Life Insurer printed referred advertisements in the intervening period during the transitioning (Referral to Corporate Agency) but the same were supplied and displayed at the RRBs only after they became corporate agents

The authority accorded time period up 30/09/2016 to shift the servers to be in line with the IRDAI (Maintenance of Insurance Records) Regulations, 2015

It is mandated that proposal forms shall be processed promptly and furnish the insured, a copy of the proposal form free of charge within 30 days of acceptance of the proposal which the insurer failed to do

The Life Insurer submitted that the relevant regulations provide 30 days time limit to insurance companies to decide a claim from the date of receipt of all requirements. If the time taken is beyond the 30 days, which is the due date for taking a decision on a claim, then interest is payable beyond the due date when 30 days expireThe said guidelines prevent the Life Insurers from entering into agreements with group organizers. Hence it can be construed that the arrangements were made to channelize extra payouts to the Group Master policyholders thereby violating the provisions of said Group Insurance Guidelines

As per Clause 11 of the lease agreement, in case of the lease cancellation, the Life insurer is required to pay all losses associated with termination of lease agreement including liquidated damages equal to the aggregate amount of present value of all future rentals payable under the agreement. Thus, as per Para 9a of AS 19, the classification of lease as operating lease by the Life insurer instead of financial lease is not justified

some locations were wrongly classified as Rural, though the addresses pertained to urban locations. It was found that prominent cities which can be easily noted as urban areas were also classified as rural areas. This indicates the lack of proper systems in classification of the business. Therefore, some portion of rural business achievement is perhaps unauthentic

In the financial year 2011-12, a gross payment of Rs.16.29 lakhs to entity for data processing services and during the one year period when the group insurance policy was in force the company received a premium at the half-yearly premium rate of Rs.1.03 LakhsAs per the point no.23 of the Circular, all the existing individual products which have a separate and identified savings component shall be re-filed with the Authority, in accordance with the Guidelines and fresh approval is to be obtained. The Life Insurer has not ensured the same

The amounts waived towards any account, (though it is not a part of the designated premium), to take out or continue a policy can be treated as an inducement and violates provisions of Section 41 of Insurance, 1938

0000007

Rationale Order_signatoDesignation Signatory RemarksThe insurer insured that VR Iyer Member F&I

VR Iyer Member F&IFurther orders to re-examine such cases VR Iyer Member F&I There was a further communication between the Authority and the life insurer. Further queries were raised on 22nd July'14 and 21st July'15 response to which were received on 1st August' 14 and 5th August' 15 respectively. A meeting was held on 6th August' 15 to discuss the observations of the inspection and then a show cause notice was issued.

The policies examined werVR Iyer Member F&IVR Iyer Member F&I

Further orders issued to dicontinue the practice VR Iyer Member F&IThe Life Insurer has not VR Iyer Member F&I

VR Iyer Member F&IVR Iyer Member F&IVR Iyer Member F&IVR Iyer Member F&I

The corrective action hasVR Iyer Member F&ILife Insurer submitted doVR Iyer Member F&I

VR Iyer Member F&IThe corrective action hasVR Iyer Member F&I

VR Iyer Member F&IVR Iyer Member F&IVR Iyer Member F&I

No chargespressed further VR Iyer Member F&IThe life insurer submitte VR Iyer Member F&I

VR Iyer Member F&I Authority had raised further queries after the scrutiny of the first compliance through an email sent on 19-11-15. This was responded on 30-11-15VR Iyer Member F&IVR Iyer Member F&IVR Iyer Member F&IVR Iyer Member F&IVR Iyer Member F&IVR Iyer Member F&IVR Iyer Member F&IVR Iyer Member F&IVR Iyer Member F&I Post scrutiny of first compliance, the authority had raised further queries through an email dated 23-11-15 which was responded back on 2-12-2015VR Iyer Member F&IVR Iyer Member F&IVR Iyer Member F&IVR Iyer Member F&IVR Iyer Member F&IVR Iyer Member F&IVR Iyer Member F&IVR Iyer Member F&IVR Iyer Member F&I

No charges pressed further but the life insurer VR Iyer Member F&IVR Iyer Member F&IVR Iyer Member F&IVR Iyer Member F&I The Authority seeked further clarification through a letter on 26-12-14 which was responded back on 18-01-15VR Iyer Member F&IVR Iyer Member F&I

Despite the non compliance with the limits of EoM, the insurer has ensured that during the year 2014-15, the interest of the par policyholders were not impacted, compliance with the product filing had been ensured and at no time interest of the policyholders had been affected

The Life Insurer categorically confirmed that the suicide clause was not waived and the policy was operated in compliance with the scheme rules onlyThe given funds are funds at product level only and form part of total life fund and that they are in compliance at the life fund level

Ace Life Fund is not a separate fund and they are in compliance with investment exposure norms in case of Asset Backed Securities (ABS)

The shortage waived is recoverable on next renewal or any payouts to be made to the policy holders and with regard to the waiver on service tax, the policy was signed when the service tax was not applicable on annuity policies and therefore, service tax was absorbed by the company The Life Insurer submitted that the Master policy has been discontinued and no payouts other than the given were made

The clause referred does not prevent sharing of expenses of co-branding sales literature with the Corporate Agents. However, the amounts paid were not in line with the said clause of Corporate Agency Guidelines. Hence the Life Insurer has violated the referred guidelines

In regard to advertisements indicating that the products of the company are available through these referral entities, at that point of time, co-branded sales literature used to be under file and use mode. Hence printing the advertisements during transition period even before the entities becoming corporate agent indicates casual approach of the Life Insurer towards complying with the advertisement guidelines

observation made by the Authority was one-off instance where cheque was collected and pay order was prepared and there was a delay in deposit of premium into company’s account

The Life Insurer had contemplated on bringing the servers back to India to be in compliance with the referred Regulations but had requested the authority for further time extention

The insurer submitted that though the Company had initially obtained the undertaking from the customer, in reality they have accepted if any customer requests for acceptance of Standard Age proofs and confirmed that they have discontinued the practice as on date

Life Insurer informed about taking up the matter with the concerned vendors and over the past 2 years significant improvement (2014 – 99.79% and 2015-99.97% of policies were dispatched in time) has been shown in the TAT for issuance of policy bonds to comply with the regulatory timelines

The maturity claim was on a Rural Life Insurance product and also the amount was only Rs. 220, So the company decided to settle the claims by waiving policy bond and it is taking constant effort to ensure that all the cheques are encashed

Life insurer submitted that they had amended the process from 2013 and confirmed that they have re-opened all the existing delayed cases and paid penal interests from the date of last requirement

There shall not be any payments as management expenses or documentation expenses or profit commission or bulk discount or payment of any other description to the group organizer or group manager. The contention of the Life Insurer that the services availed by the company had no relevance to services offered under Group insurance contract is not tenable because the Group Master policyholders are not engaged in the primary business of offering the services availed by the Life Insurer

The Life Insurer had submitted opinion from an audit firm which viewed that on the basis of facts and circumstances’, applying the various criteria, the company’s practice of treating the lease as operating lease is correct. The Life insurer further confirmed that even if the lease be treated as financial lease, there was no negative impact on the solvency margin requirements and the company’s solvency margin would have been 155% for the said year

One entity is not a related party of any insurance distributor. The insurer has also sumbitted certification that enough due diligence is exercised before outsourcing the activity to the related party of the insurance broker

The investment department uses AXA Group’s proprietary CPPI model which is a modified version of the conventional CPPI model (which is used by Actuarial Department to evaluate the funds ability to meet the guarantee) and has enhanced features like volatility caps and momentum strategy in built for better risk management. The company follows the investment pattern as per the product mandate and file and use document which allows investment allocation of 0-100 in equities, gilts and money market instruments. The guarantee charges are levied for guaranteeing the highest NAV recorded during the tracking period or Rs.12/- whichever is higher to protect the customer returns as well as to cover the risk of the company due to investments in both equity and debt securities which are exposed to market risk, gap risk and reinvestment risk. Also, with regard to Bachat Bima Yojana,the Company held back a buffer of 0.5% to ensure there was no cross subsidy between the policyholders. However, it is not a charge and will be refunded in the policyholders account on termination of the contract in the manner in which they have contributed

The issues identified by the Authority are from the initial stages of operations and primarily relate to remote areas where facilities were not so developed. Also, the company is making a continuous effort to improve its systems to ensure timely processing of proposals

The life insurer has confirmed that systems are being strengthened to ensure non-recurrence of such errors

The company has further strengthened systems to ensure perfect controls over dispatch of policy bonds and date of receipt at the policy holder. The turnaround time has been impoved and exceeded only for 2 per cent of the cases in 2015

Free Look Cancellations sometimes require detailed investigations to be done by an independent Fraud Control Team of the Company for alleged cases of mis-selling which sometimes may be received beyond stipulated time frame of FLC. Further, awards/orders received from Honourable Court/Ombudsman/Other Grievance Redressal Forums sometimes requires us to cancel and refund the premium in certain cases beyond stipulated time frame of FLC which the Company is bound to comply with. Also, the policy admin system had a system limitation that any changes to the policy needed to be carried out through a cancellation. This limitation in the systems has been addressed and system now is able to distinguish between FLCs and other cancellations

If there is a reasonable apprehension of fraud or material non-disclosure either at pre-issuance or at the point of claim, then the Company puts the claim on hold until the complete documentation is submitted so that the company can properly establish its liability to pay or reject the claim on a sound basis. One case being referred to by the authority is about life assured who suffered from cancer but his family was unable to produce any records of medical treatment and hospital bills stating it was a tradition in their community to burn the documents at the time of the funeral and the in the other case claimant is not responding and not willing to provide any past medical records

There shall not be any agreement with MPH as per the referred guidelines. Hence the Life Insurer should have terminated the agreement immediately on issuing the Master policy

It is a primary duty of the Life Insurer to suitably regulate its corporate agents in compliance with the Insurance Act, 1938 and the regulations under which the insurance business can be conducted in India. On examining the documentary evidences, it was observed that, the life insurer has not ensured the same. The remedial actions taken as enunciated above were also post inspection by the Authority

There was a clear association between the referred agents' and given entities. From the data and agreements available on record, it was construed that the extra payouts were channelized under the guise of the service level agreements, to circumvent remuneration limits prescribed under Section 40A (1) of Insurance Act, 1938

Entering into additional relationships with Corporate Agents is in violation of extant guidelines in respect of licensing of Corporate Agents. Entering into relationship with related entities of Corporate Agents shall be construed as violation of the referred guidelines. The payouts made were also not reasonable and services availed were also outside the scope of the said guidelines. Further, the agreements were terminated as on date.

The advertisements mislead the prospects. The provider of infrastructure cannot be consulted for further details on the product because he is neither the branch office/regional office of the Life Insurer nor an insurance intermediary. This gives scope for general public to infer that the entity is intermediary, of the Life Insurer

As per Regulation 3(1) (a) and (b) and Regulation 7 of IRDA (Licensing of individual agents) Regulations, 2000, it is clear that the fee for obtaining license is to be paid by the applicant. The Life Insurer’s contention, which states that regulations governing licensing of insurance agents do not expressly prohibit insurers from license fee, is purely mis-conceived and incorrect.

There was no categorical approval from the Authority for the modifications effected but the modifications made were to comply with the act provisions

The life insurer submitted that the cost of recovering the service tax from the members would have been very high and that the entire amount would have anyhow been charged to share holders because the group policies are classified under Group non-part product segment

0000008

There was a further communication between the Authority and the life insurer. Further queries were raised on 22nd July'14 and 21st July'15 response to which were received on 1st August' 14 and 5th August' 15 respectively. A meeting was held on 6th August' 15 to discuss the observations of the inspection and then a show cause notice was issued.

Authority had raised further queries after the scrutiny of the first compliance through an email sent on 19-11-15. This was responded on 30-11-15

Post scrutiny of first compliance, the authority had raised further queries through an email dated 23-11-15 which was responded back on 2-12-2015

The Authority seeked further clarification through a letter on 26-12-14 which was responded back on 18-01-15

0000009


Post scrutiny of first compliance, the authority had raised further queries through an email dated 23-11-15 which was responded back on 2-12-2015

00000010


00000011

Final 06-05-16Final 06-05-16Final 06-05-16Final 06-05-16Final 06-05-16Final 06-05-16Final 06-05-16Final 06-05-16Final 06-05-16Final 06-05-16Final 06-05-16

8 Final 10-05-169 IRDAI/F&A/ORD/EMT/104Final 25-05-16

IRDA/ENF/MISC/ONS/88/05/2016IRDA/ENF/MISC/ONS/88/05/2016IRDA/ENF/MISC/ONS/88/05/2016IRDA/ENF/MISC/ONS/88/05/2016IRDA/ENF/MISC/ONS/88/05/2016IRDA/ENF/MISC/ONS/88/05/2016IRDA/ENF/MISC/ONS/88/05/2016IRDA/ENF/MISC/ONS/88/05/2016IRDA/ENF/MISC/ONS/88/05/2016IRDA/ENF/MISC/ONS/88/05/2016IRDA/ENF/MISC/ONS/88/05/2016IRDAI/F&A/EoM/ORD/14/2016

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NANANANANANANANANANANANA

Sahara India Life Insu NA











M/s. Kotak Mahindra Old Mutual Life Insurance Company LimitedBharti Axa Life Insurance Company Limited

00000013

30-09-13 20-10-13 22-01-16 15-02-1630-09-13 20-10-13 22-01-16 15-02-1630-09-13 20-10-13 22-01-16 15-02-1630-09-13 20-10-13 22-01-16 15-02-1630-09-13 20-10-13 22-01-16 15-02-1630-09-13 20-10-13 22-01-16 15-02-1630-09-13 20-10-13 22-01-16 15-02-1630-09-13 20-10-13 22-01-16 15-02-1630-09-13 20-10-13 22-01-16 15-02-1630-09-13 20-10-13 22-01-16 15-02-1630-09-13 20-10-13 22-01-16 15-02-1612-02-14 03-03-14 24-04-14 20-05-1418-11-15 16-12-15 28-03-16 27-04-16

00000014

4 Non-compliance with date of application of NAV for ULIPs5 Deduction of one month extra mortality charge6 Settlement in the favour of Master Policyholder7 Repudiation due to non-disclosure in health declaration8 Claim of death benefits by MPHs in batches/lots9 Issues in solicitation of business by corporate agents

10 Agreements with related parties of brokers11 Payouts to corporate agents and brokers through various arrangements12 Interest for mis-selling debited as litigation fee to policyholders' account13 Accounting policy in respect of recognition of reinsurance premium over the period14 Reserve for premium waiver benefit given on death while no such reserve create

1 Non-compliance with the Expenses on management1 Non-compliance with the Expenses on management

00000015

File and Use ProceduresClaims are settled in favour of Group Master Policy Holder

Schedule A-Part 1- Regulatio

the insurer was non-compliant with EoM limitsthe insurer was non-compliant with EoM limits Section 40B of the Insuranc

In respect of Top-Up cases, date of application of NAV as per ULIP Guidelines, 2005 has not been complied

Clause 10.6 of ULIP Guidelines. 32/ IRDA / ACTL/DEC-2005 dated 21.12.2005In case of linked lapsed policies, the Life Insurer is in practice

of deducting one month extra mortality charge

Clause C-7 of Group Insurance Guidelines, No.015/IRDA/Life/Circular/GI Guidelines/2005 dated 14/07/2005

Claims under Group Master Policy were repudiated on the grounds of “non-disclosure in health declaration” by the individual member. However, DOGH (Declaration of Good health of the borrower i.e., member covered) to be filled by individual member providing his/her details for the insurance coverage and health condition under a group policy contract was in English language and in most of the cases the members covered signed in vernacular language and no declaration was obtained to the extent that the contents of DOGH were explained to the member/s to be covered.

Regulations 3(4) and 4(2) of IRDA (Protection of Policyholders’ Interests) Regulations, 2002

Some master policyholders were claiming the death claim benefits in batches / lots though the dates of death of the members covered were different and the group policyholder or organizer was aware of the fact of the incident or event

Regulation 8 of IRDA (Protection of Policyholder s’ Interests) Regulations, 2002

The Life Insurer had created multiple code numbers for single corporate agent or broker based on the location of the business procured or the location of the customer. There was no control on the business generated by specified persons of a corporate agent. The details / information regarding specified person-wise business solicited were also not provided. The limited number of specified persons or qualified persons compared to the large number of places of new business procured tantamount to sourcing of significant part of the business through unlicensed persons

IRDA Circular No. IRDA/CIR/010/2003, dated 27/03/2003

Outsourcing agreements were entered with related parties of the Broker and payouts are made under the guise of the same

Regulation 19 of IRDA (Insurance Brokers) Regulations, 2002 and Clause 8.4, 9.12 of Outsourcing Guidelines, No. IRDA/LIFE/CIR/GLD/013/02/2011 dated 01.02.2011

Arrangements were made with the related parties of the CAs and Brokers and channelizing the extra payouts in the name of ‘customer meets’, ‘road shows’, ‘mailer campaigns’ etc., activities’

clause 21 of IRDA Circular No.017/IRDA/Cicrular/CA Guidelines/2005 dated 14/0/72005, Regulation 19 of IRDA (insurance Brokers) Regulations, 2002 and Clause 8.4 and 9.12 of Outsourcing Guidelines, No. IRDA/LIFE/CIR/GLD/013/02/2011 dated 01.02.2011

The Life Insurer was in practice of refunding the insurance premium amount along with the interest as per the directions of consumer disputes redressal forum/Ombudsman in respect of mis-selling of a policy. In this regard it was observed that the insurer had debited such interest amount for mis-selling as litigation fee of policies to policy holders’ account instead of shareholders’ account leaving the existing policyholders in financially disadvantageous situation

IRDA Preparation of Financial Statements and Auditor’s Report of Insurance Companies) Regulations, 2002 (Refer Form A-PL- Profit and Loss Account item “Expense other than those directly related to the insurance business”)

On scrutiny of details of pre-payments in trial balance as 31.03.2013, it was noticed that an amount Rs.10.47 Crores was shown as Pre-paid reinsurance. The total premiums received in the revenue account (net of reinsurance premiums) paid for the unexpired portion of the year is shown as prepaid expenses. The reinsurance premiums are paid only for those policies where the risk cover is granted by the Life Insurer, for which the Life insurer had received the premiums. The accounting policy of the Life Insurer states that ‘Reinsurance premium and reinsurance commissions are recognised over the period of risk’. Hence, the accounting policy in respect of recognition of reinsurance premium over the period of risk is not in line with relevant regulations.

The reserve for premium waiver benefit was made at the time of death of the life assured. The reserve amount is the present value of the future premium. However, no explicit reserve was made for this benefit before the death or disability occured.

2(2) of Schedule IIA of IRDA (Assets Liabilities and Solvency Margin of Insurers) Regulations, 2000

Section 40B of the Insurance Act, 1938 read with Rule 17D of the Insurance Rules, 1939

00000016

NA Y Nil Issue of warningNA Y Nil Issue of warningNA N Nil No charges pressed furNA Y 500000NA N Nil No charges pressed furNA N Nil No charges pressed furNA N Nil No charges pressed furNA Y Nil Issue of warning

53418 Y Nil No charges pressed furNA Y Nil No charges pressed furNA N Nil No charges pressed furNA Y Nil Issue of warningNA The EoM ratio was 135.89% foY Nil Issue of warning

In respect of premiums received up to 3:00 PM by the life insurer along with local cheque or a demand draft payable, the closing NAV of premium received date shall be applicable. In respect of premiums received after 3:00 PM with a local cheque or demand draft the closing NAV of the next business day shall be applicable. Further in respect of premiums received with outstation cheques/demand drafts as the place where the premium is received, the closing NAV of the day on which cheques/demand draft is realised shall be made applicable. it was noticed that there were local cheques in some of the cases on which closing NAV of the day the cheque was relaised was applied

The sample case examined belongs to a 100% allocation charge product and therefore there is ultimately no implication on the policyholder. However, the policy administration system of the insurer was in the process of deducting such extra charges across entire lapsed cases

The Life insurer was obtaining an upfront letter from the nominee or legal heir that the monies were received by them and the Life Insurer is not obtaining any confirmation of actual receipt of claim monies. The life insurer had no control on the balance monies, if any, payable after adjusting the outstanding loans to the nominee or legal heir of the deceased member even in cases of Loanee or Creditor schemes. This gives scope for misuse of claim monies by the master policy holders.

Life insurer has been ordered to review such claims to ensure that no genuine claim is repudiated. It has also been directed to strengthen the systems for scrutiny of proposal papers before risk is covered thereby to ensure that such administrative lapses do not recur

The master policyholders did not claim the benefits as and when they receive the death intimations from the nominees / legal heirs of the deceased members. This resulted in delay in settlement of claims by the Life insurer. There was no intimation / correspondence with the nominee or legal heir of the deceased member by the Life insurer (at least in case of claims). This lead to undue delays in settlement of claims though the reason for delay was on the part of the master policyholders

The expenses relate to interest/compensation paid to policy holders for compliance to the directions of consumer disputes redressal forum/ombudsman etc should not be due in normal course of the insurance business. Hence such expenses should be debited to Shareholders Account without affecting the interest of the policy holdersThe insurer reported EoM ratio of 185.75%, 184.88% and 181.59% during the years 2012-13, 2013-14 and 2014-15 respectively

00000017

It is construed that the VR Iyer Member F&IVR Iyer Member F&IVR Iyer Member F&IVR Iyer Member F&IVR Iyer Member F&IVR Iyer Member F&IVR Iyer Member F&IVR Iyer Member F&IVR Iyer Member F&I

Life Insurer has deviated VR Iyer Member F&IVR Iyer Member F&IVR Iyer Member F&I Authority further wrote a letter on 29-07-15 for which the insurer replied on 12-08-15. Authority issued two show cause notices, another one being issued on 18-11-15 which was replied on 4-12-15

the insurer is non-compliVR Iyer Member F&I

The Life Insurer has to follow the ‘grace period’ as specified in the file and use application. It is understood that the practice adopted was neither documented in the File and Use application nor sought any subsequent approval for the same. Hence this is a gross violation of File and Use Guidelines

The insurer submitted that the revised claim settlement process has been changed in all the group policies except in the case of one group credit policy. Also, under the policy where the revised process could not be completed, new business was stopped and further certified with the authority that there are systems and checks in place to ensure the eligible claim amount is reaching the beneficiary/claimant with regard to the balance claim over and above outstanding loan reaching the nominee/beneficiary

The life insurer should have at least ensured that the contents of the proposal forms are made understood by the policy holder. If this is not ensured, the same may lead to unintentional non-disclosure by the Members of the Group. The Life Insurer, hence did not adhere to compliance of the given regulations

The master policy holders referred to by the authority are lending institutions which operate in remote locations. They get to know about the death of a particular borrower only when they stop getting their EMIs and they go to collect the EMI that has become due. Thereafter, they assist the family in the claim settlements and inform the company about the claim along with necessary claim documentation. Hence, it may appear that the claims are intimated in batches / lots. Further it is to submit that once the claims are intimated to the Company, the claims are being processed promptly

The limited number of specified persons or qualified persons compared to the large number of places of new business procured gives scope to infer that significant part of the business is procured through unlicensed persons. However, as per the submissions made by the company, it has been established that there are checks in place to ensure that each proposal is sourced by a specified agent only and the business is solicted through authorised persons only

The activities outsourced were non-core activities and the Outsourcing guidelines do not prohibit outsourcing of these activities. These activities required specialised infrastructure and capabilities. As the entity was an established entity for these activities, the same were outsourced to it. The agreement was on the basis of the entity’s representation of its credentials in providing the said services. Further, the vendor does not fall into the category of entities which are prohibited from undertaking outsourcing activities under the Guidelines

The submissions made are taken on record. However, as per Clause 13 of Outsourcing Guidelines, 2011, Insurers are advised to refer to IRDAI for further clarifications in case any ambiguity regarding the classification of the activities as core or non-core which are not specified in the said guidelines. Hence the Life Insurer unilaterally shall not decide whether a particular activity is outside or inside the scope of outsourcing activities mentioned in the Outsourcing Guidelines, 2011. As per the submissions made, it is construed that Life Insurer has not complied with Clause 13 referred herein

Post inspection by the Authority, the interest compensation was debited towards interests and penalty to the Shareholder’s Account

Company had attempted to reduce the complexity of models by reserving implicitly for the inbuilt premium waiver benefit. However, the company made sure that the implicit method of allowing for the premium waiver benefit does not impact the financial stability or the solvency of the company. And, post observation by the Authority, explicit reserves have been created to be in line with extant regulations

the insurer is non-compliant with EoM limits. However, the authority has been assured regarding the efforts being taken to bring downt the EoM in future

00000018

Authority further wrote a letter on 29-07-15 for which the insurer replied on 12-08-15. Authority issued two show cause notices, another one being issued on 18-11-15 which was replied on 4-12-15

00000019

Authority further wrote a letter on 29-07-15 for which the insurer replied on 12-08-15. Authority issued two show cause notices, another one being issued on 18-11-15 which was replied on 4-12-15

00000020

Sn Order_pdf_file_id inal/interim) Order_date Accused_entity Colluding_agen1 IRDA/ENF/ORD/ONS/098/ Final 23-05-2016 M/s Future Generali India Ins NA

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IRDA/ENF/ORD/ONS/098/ Final 23-05-2016 M/s Future Generali India Ins NAIRDA/ENF/ORD/ONS/098/ Final 23-05-2016 M/s Future Generali India Ins Support Direct

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IRDA/ENF/ORD/ONS/098/ Final 23-05-2016 M/s Future Generali India Ins NAIRDA/ENF/ORD/ONS/098/ Final 23-05-2016 M/s Future Generali India Ins NA

2 IRDAI/ENF/ORD/ONS/086 Final 5/11/2016 Royal Sundaram Alliance Ins NA

IRDAI/ENF/ORD/ONS/086 Final 5/11/2016 Royal Sundaram Alliance Ins T V Sundram IyIRDAI/ENF/ORD/ONS/086 Final 5/11/2016 Royal Sundaram Alliance Ins NAIRDAI/ENF/ORD/ONS/086 Final 5/11/2016 Royal Sundaram Alliance Ins NAIRDAI/ENF/ORD/ONS/086 Final 5/11/2016 Royal Sundaram Alliance Ins NAIRDAI/ENF/ORD/ONS/086 Final 5/11/2016 Royal Sundaram Alliance Ins NAIRDAI/ENF/ORD/ONS/086 Final 5/11/2016 Royal Sundaram Alliance Ins NAIRDAI/ENF/ORD/ONS/086 Final 5/11/2016 Royal Sundaram Alliance Ins NAIRDAI/ENF/ORD/ONS/086 Final 5/11/2016 Royal Sundaram Alliance Ins NAIRDAI/ENF/ORD/ONS/086 Final 5/11/2016 Royal Sundaram Alliance Ins Sundaram FinanIRDAI/ENF/ORD/ONS/086 Final 5/11/2016 Royal Sundaram Alliance Ins NAIRDAI/ENF/ORD/ONS/086 Final 5/11/2016 Royal Sundaram Alliance Ins NAIRDAI/ENF/ORD/ONS/086 Final 5/11/2016 Royal Sundaram Alliance Ins Mr. Rajan DuggIRDAI/ENF/ORD/ONS/086 Final 5/11/2016 Royal Sundaram Alliance Ins M/s. T V SundrIRDAI/ENF/ORD/ONS/086 Final 5/11/2016 Royal Sundaram Alliance Ins Ms. Rupal PatelIRDAI/ENF/ORD/ONS/086 Final 5/11/2016 Royal Sundaram Alliance Ins NAIRDAI/ENF/ORD/ONS/086 Final 5/11/2016 Royal Sundaram Alliance Ins NAIRDAI/ENF/ORD/ONS/086 Final 5/11/2016 Royal Sundaram Alliance Ins NAIRDAI/ENF/ORD/ONS/086 Final 5/11/2016 Royal Sundaram Alliance Ins NAIRDAI/ENF/ORD/ONS/086 Final 5/11/2016 Royal Sundaram Alliance Ins NAIRDAI/ENF/ORD/ONS/086 Final 5/11/2016 Royal Sundaram Alliance Ins M/s. Tata MotorIRDAI/ENF/ORD/ONS/086 Final 5/11/2016 Royal Sundaram Alliance Ins BASIX and KBSIRDAI/ENF/ORD/ONS/086 Final 5/11/2016 Royal Sundaram Alliance Ins TML/TBSS and IRDAI/ENF/ORD/ONS/086 Final 5/11/2016 Royal Sundaram Alliance Ins TML/TBSS and IRDAI/ENF/ORD/ONS/086 Final 5/11/2016 Royal Sundaram Alliance Ins NAIRDAI/ENF/ORD/ONS/086 Final 5/11/2016 Royal Sundaram Alliance Ins NAIRDAI/ENF/ORD/ONS/086 Final 5/11/2016 Royal Sundaram Alliance Ins NAIRDAI/ENF/ORD/ONS/086 Final 5/11/2016 Royal Sundaram Alliance Ins NAIRDAI/ENF/ORD/ONS/086 Final 5/11/2016 Royal Sundaram Alliance Ins NAIRDAI/ENF/ORD/ONS/086 Final 5/11/2016 Royal Sundaram Alliance Ins M/s. Sundaram IRDAI/ENF/ORD/ONS/086 Final 5/11/2016 Royal Sundaram Alliance Ins NAIRDAI/ENF/ORD/ONS/086 Final 5/11/2016 Royal Sundaram Alliance Ins Bharatiya SamruIRDAI/ENF/ORD/ONS/086 Final 5/11/2016 Royal Sundaram Alliance Ins NAIRDAI/ENF/ORD/ONS/086 Final 5/11/2016 Royal Sundaram Alliance Ins M/s. BASIX

3 IRDA/ENF/ORD/ONS/085/ Final 5/10/2016 M/s Maruti InsIRDA/ENF/ORD/ONS/085/ Final 5/10/2016 Tata Business SuIRDA/ENF/ORD/ONS/085/ Final 5/10/2016 Tata Business SuIRDA/ENF/ORD/ONS/085/ Final 5/10/2016 NAIRDA/ENF/ORD/ONS/085/ Final 5/10/2016 NAIRDA/ENF/ORD/ONS/085/ Final 5/10/2016 NAIRDA/ENF/ORD/ONS/085/ Final 5/10/2016 NA

4 IRDA/ENF/ORD/ONS/046/ Final 3/17/2016 M/s The New India Assurance NAIRDA/ENF/ORD/ONS/046/ Final 3/17/2016 M/s The New India Assurance NAIRDA/ENF/ORD/ONS/046/ Final 3/17/2016 M/s The New India Assurance M/s Honda MotorIRDA/ENF/ORD/ONS/046/ Final 3/17/2016 M/s The New India Assurance Corporation BanIRDA/ENF/ORD/ONS/046/ Final 3/17/2016 M/s The New India Assurance NAIRDA/ENF/ORD/ONS/046/ Final 3/17/2016 M/s The New India Assurance NAIRDA/ENF/ORD/ONS/046/ Final 3/17/2016 M/s The New India Assurance NAIRDA/ENF/ORD/ONS/046/ Final 3/17/2016 M/s The New India Assurance NA

M/s National Insurance Company Limited M/s National Insurance Company Limited M/s National Insurance Company Limited M/s National Insurance Company Limited M/s National Insurance Company Limited M/s National Insurance Company Limited M/s National Insurance Company Limited

IRDA/ENF/ORD/ONS/046/ Final 3/17/2016 M/s The New India Assurance NAIRDA/ENF/ORD/ONS/046/ Final 3/17/2016 M/s The New India Assurance NAIRDA/ENF/ORD/ONS/046/ Final 3/17/2016 M/s The New India Assurance NAIRDA/ENF/ORD/ONS/046/ Final 3/17/2016 M/s The New India Assurance NAIRDA/ENF/ORD/ONS/046/ Final 3/17/2016 M/s The New India Assurance NAIRDA/ENF/ORD/ONS/046/ Final 3/17/2016 M/s The New India Assurance NAIRDA/ENF/ORD/ONS/046/ Final 3/17/2016 M/s The New India Assurance NA

5 IRDA/ENF/ORD/ONS/23/0 Final 2/12/2016 M/s The Oriental Insurance Hero Corporate IRDA/ENF/ORD/ONS/23/0 Final 2/12/2016 M/s The Oriental Insurance NAIRDA/ENF/ORD/ONS/23/0 Final 2/12/2016 M/s The Oriental Insurance NAIRDA/ENF/ORD/ONS/23/0 Final 2/12/2016 M/s The Oriental Insurance

6 IRDAI/HLT/MISC/ORD/016 Final 1/21/2016 M/s The New India AssuranceNAIRDAI/HLT/MISC/ORD/016 Final 1/21/2016 M/s The New India AssuranceNAIRDAI/HLT/MISC/ORD/016 Final 1/21/2016 M/s The New India AssuranceNAIRDAI/HLT/MISC/ORD/016 Final 1/21/2016 M/s The New India AssuranceNAIRDAI/HLT/MISC/ORD/016 Final 1/21/2016 M/s The New India AssuranceNA

7 IRDA/ENF/ORD/ONS/006/ Final 1/7/2016 M/s Iffco-Tokio General Insu M/s ITISLIRDA/ENF/ORD/ONS/006/ Final 1/7/2016 M/s Iffco-Tokio General Insu M/s ITISLIRDA/ENF/ORD/ONS/006/ Final 1/7/2016 M/s Iffco-Tokio General Insu M/s ITISLIRDA/ENF/ORD/ONS/006/ Final 1/7/2016 M/s Iffco-Tokio General Insu M/s Maruti InsuIRDA/ENF/ORD/ONS/006/ Final 1/7/2016 M/s Iffco-Tokio General Insu M/s. Honda SielIRDA/ENF/ORD/ONS/006/ Final 1/7/2016 M/s Iffco-Tokio General Insu M/S. WardhmanIRDA/ENF/ORD/ONS/006/ Final 1/7/2016 M/s Iffco-Tokio General Insu NAIRDA/ENF/ORD/ONS/006/ Final 1/7/2016 M/s Iffco-Tokio General Insu NAIRDA/ENF/ORD/ONS/006/ Final 1/7/2016 M/s Iffco-Tokio General Insu M/s Lanson Val

8 IRDA/ENF/ORD/ONS/0050 Final 1/7/2016 M/s Universal Sompo GeneralNAIRDA/ENF/ORD/ONS/0050 Final 1/7/2016 M/s Universal Sompo GeneralNAIRDA/ENF/ORD/ONS/0050 Final 1/7/2016 M/s Universal Sompo General HSCI and SMCIRDA/ENF/ORD/ONS/0050 Final 1/7/2016 M/s Universal Sompo GeneralNAIRDA/ENF/ORD/ONS/0050 Final 1/7/2016 M/s Universal Sompo GeneralNAIRDA/ENF/ORD/ONS/0050 Final 1/7/2016 M/s Universal Sompo GeneralNAIRDA/ENF/ORD/ONS/0050 Final 1/7/2016 M/s Universal Sompo GeneralHSCI and AutomIRDA/ENF/ORD/ONS/0050 Final 1/7/2016 M/s Universal Sompo GeneralHonda Siel Car

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Date_of_onsite_inspection_first_communication f_first_Response ause_notice_date19-08-2013 – 27-08-2013 20-11-2013 28-12-2013 26-08-2015

19-08-2013 – 27-08-2013 20-11-2013 28-12-2013 26-08-2015

19-08-2013 – 27-08-2013 20-11-2013 28-12-2013 26-08-201519-08-2013 – 27-08-2013 20-11-2013 28-12-2013 26-08-201519-08-2013 – 27-08-2013 20-11-2013 28-12-2013 26-08-201519-08-2013 – 27-08-2013 20-11-2013 28-12-2013 26-08-201519-08-2013 – 27-08-2013 20-11-2013 28-12-2013 26-08-201519-08-2013 – 27-08-2013 20-11-2013 28-12-2013 26-08-2015

19-08-2013 – 27-08-2013 20-11-2013 28-12-2013 26-08-2015

19-08-2013 – 27-08-2013 20-11-2013 28-12-2013 26-08-201519-08-2013 – 27-08-2013 20-11-2013 28-12-2013 26-08-2015

19-08-2013 – 27-08-2013 20-11-2013 28-12-2013 26-08-201519-08-2013 – 27-08-2013 20-11-2013 28-12-2013 26-08-2015

19-08-2013 – 27-08-2013 20-11-2013 28-12-2013 26-08-201519-08-2013 – 27-08-2013 20-11-2013 28-12-2013 26-08-2015

19-08-2013 – 27-08-2013 20-11-2013 28-12-2013 26-08-201519-08-2013 – 27-08-2013 20-11-2013 28-12-2013 26-08-201519-08-2013 – 27-08-2013 20-11-2013 28-12-2013 26-08-201519-08-2013 – 27-08-2013 20-11-2013 28-12-2013 26-08-201519-08-2013 – 27-08-2013 20-11-2013 28-12-2013 26-08-2015

19-08-2013 – 27-08-2013 20-11-2013 28-12-2013 26-08-201519-08-2013 – 27-08-2013 20-11-2013 28-12-2013 26-08-201519-08-2013 – 27-08-2013 20-11-2013 28-12-2013 26-08-201519-08-2013 – 27-08-2013 20-11-2013 28-12-2013 26-08-201519-08-2013 – 27-08-2013 20-11-2013 28-12-2013 26-08-2015

19-08-2013 – 27-08-2013 20-11-2013 28-12-2013 26-08-201519-08-2013 – 27-08-2013 20-11-2013 28-12-2013 26-08-201519-08-2013 – 27-08-2013 20-11-2013 28-12-2013 26-08-2015

19-08-2013 – 27-08-2013 20-11-2013 28-12-2013 26-08-2015

19-08-2013 – 27-08-2013 20-11-2013 28-12-2013 26-08-2015

19-08-2013 – 27-08-2013 20-11-2013 28-12-2013 26-08-2015

19-08-2013 – 27-08-2013 20-11-2013 28-12-2013 26-08-2015

19-08-2013 – 27-08-2013 20-11-2013 28-12-2013 26-08-2015

19-08-2013 – 27-08-2013 20-11-2013 28-12-2013 26-08-2015

19-08-2013 – 27-08-2013 20-11-2013 28-12-2013 26-08-2015

19-08-2013 – 27-08-2013 20-11-2013 28-12-2013 26-08-201519-08-2013 – 27-08-2013 20-11-2013 28-12-2013 26-08-2015

4-02-2013 - 13-02-2013 9/3/2013 14.09.2013 10/7/2015

4-02-2013 - 13-02-2013 9/3/2013 14.09.2013 10/7/20154-02-2013 - 13-02-2013 9/3/2013 14.09.2013 10/7/20154-02-2013 - 13-02-2013 9/3/2013 14.09.2013 10/7/20154-02-2013 - 13-02-2013 9/3/2013 14.09.2013 10/7/20154-02-2013 - 13-02-2013 9/3/2013 14.09.2013 10/7/20154-02-2013 - 13-02-2013 9/3/2013 14.09.2013 10/7/20154-02-2013 - 13-02-2013 9/3/2013 14.09.2013 10/7/20154-02-2013 - 13-02-2013 9/3/2013 14.09.2013 10/7/20154-02-2013 - 13-02-2013 9/3/2013 14.09.2013 10/7/20154-02-2013 - 13-02-2013 9/3/2013 14.09.2013 10/7/20154-02-2013 - 13-02-2013 9/3/2013 14.09.2013 10/7/20154-02-2013 - 13-02-2013 9/3/2013 14.09.2013 10/7/20154-02-2013 - 13-02-2013 9/3/2013 14.09.2013 10/7/20154-02-2013 - 13-02-2013 9/3/2013 14.09.2013 10/7/20154-02-2013 - 13-02-2013 9/3/2013 14.09.2013 10/7/20154-02-2013 - 13-02-2013 9/3/2013 14.09.2013 10/7/20154-02-2013 - 13-02-2013 9/3/2013 14.09.2013 10/7/20154-02-2013 - 13-02-2013 9/3/2013 14.09.2013 10/7/20154-02-2013 - 13-02-2013 9/3/2013 14.09.2013 10/7/20154-02-2013 - 13-02-2013 9/3/2013 14.09.2013 10/7/20154-02-2013 - 13-02-2013 9/3/2013 14.09.2013 10/7/20154-02-2013 - 13-02-2013 9/3/2013 14.09.2013 10/7/20154-02-2013 - 13-02-2013 9/3/2013 14.09.2013 10/7/20154-02-2013 - 13-02-2013 9/3/2013 14.09.2013 10/7/20154-02-2013 - 13-02-2013 9/3/2013 14.09.2013 10/7/20154-02-2013 - 13-02-2013 9/3/2013 14.09.2013 10/7/20154-02-2013 - 13-02-2013 9/3/2013 14.09.2013 10/7/20154-02-2013 - 13-02-2013 9/3/2013 14.09.2013 10/7/20154-02-2013 - 13-02-2013 9/3/2013 14.09.2013 10/7/20154-02-2013 - 13-02-2013 9/3/2013 14.09.2013 10/7/20154-02-2013 - 13-02-2013 9/3/2013 14.09.2013 10/7/20154-02-2013 - 13-02-2013 9/3/2013 14.09.2013 10/7/20154-02-2013 - 13-02-2013 9/3/2013 14.09.2013 10/7/2015

2-08-2010 - 6-08-2010 10/13/2010 11/18/2010 1/5/20162-08-2010 - 6-08-2010 10/13/2010 11/18/2010 1/5/20162-08-2010 - 6-08-2010 10/13/2010 11/18/2010 1/5/20162-08-2010 - 6-08-2010 10/13/2010 11/18/2010 1/5/20162-08-2010 - 6-08-2010 10/13/2010 11/18/2010 1/5/20162-08-2010 - 6-08-2010 10/13/2010 11/18/2010 1/5/20162-08-2010 - 6-08-2010 10/13/2010 11/18/2010 1/5/2016

14-02-2011 - 18-02-2011 6/28/2011 8/10/2011 5/29/201514-02-2011 - 18-02-2011 6/28/2011 8/10/2011 5/29/201514-02-2011 - 18-02-2011 6/28/2011 8/10/2011 5/29/201514-02-2011 - 18-02-2011 6/28/2011 8/10/2011 5/29/201514-02-2011 - 18-02-2011 6/28/2011 8/10/2011 5/29/201514-02-2011 - 18-02-2011 6/28/2011 8/10/2011 5/29/201514-02-2011 - 18-02-2011 6/28/2011 8/10/2011 5/29/201514-02-2011 - 18-02-2011 6/28/2011 8/10/2011 5/29/2015

14-02-2011 - 18-02-2011 6/28/2011 8/10/2011 5/29/201514-02-2011 - 18-02-2011 6/28/2011 8/10/2011 5/29/201514-02-2011 - 18-02-2011 6/28/2011 8/10/2011 5/29/201514-02-2011 - 18-02-2011 6/28/2011 8/10/2011 5/29/201514-02-2011 - 18-02-2011 6/28/2011 8/10/2011 5/29/201514-02-2011 - 18-02-2011 6/28/2011 8/10/2011 5/29/201514-02-2011 - 18-02-2011 6/28/2011 8/10/2011 5/29/2015

13-09-2010-17-09-2010 & 27-09- 11/16/2010 0 and 23-12-2010 8/7/201513-09-2010-17-09-2010 & 27-09- 11/16/2010 0 and 23-12-2010 8/7/201513-09-2010-17-09-2010 & 27-09- 11/16/2010 0 and 23-12-2010 8/7/201513-09-2010-17-09-2010 & 27-09- 11/16/2010 0 and 23-12-2010 8/7/2015

NA NA NA 29.04.2015NA NA NA 29.04.2015NA NA NA 29.04.2015NA NA NA 29.04.2015NA NA NA 29.04.2015

22-11-2010 to 26-11-2010 3/16/2011 4/29/2011 6/16/201522-11-2010 to 26-11-2010 3/16/2011 4/29/2011 6/16/201522-11-2010 to 26-11-2010 3/16/2011 4/29/2011 6/16/201522-11-2010 to 26-11-2010 3/16/2011 4/29/2011 6/16/201522-11-2010 to 26-11-2010 3/16/2011 4/29/2011 6/16/201522-11-2010 to 26-11-2010 3/16/2011 4/29/2011 6/16/201522-11-2010 to 26-11-2010 3/16/2011 4/29/2011 6/16/201522-11-2010 to 26-11-2010 3/16/2011 4/29/2011 6/16/201522-11-2010 to 26-11-2010 3/16/2011 4/29/2011 6/16/2015

9-07-2012 to 18-07-2012 11/16/2012 12/15/2012 7/22/20159-07-2012 to 18-07-2012 11/16/2012 12/15/2012 7/22/20159-07-2012 to 18-07-2012 11/16/2012 12/15/2012 7/22/20159-07-2012 to 18-07-2012 11/16/2012 12/15/2012 7/22/20159-07-2012 to 18-07-2012 11/16/2012 12/15/2012 7/22/20159-07-2012 to 18-07-2012 11/16/2012 12/15/2012 7/22/20159-07-2012 to 18-07-2012 11/16/2012 12/15/2012 7/22/20159-07-2012 to 18-07-2012 11/16/2012 12/15/2012 7/22/2015

show_cause_notice ersonal_hearings Charge N Charge_Heading21-09-2015 11/26/2015 1 Payments made to Service Providers and not r

21-09-2015 11/26/2015 2 Payments made to Intermediaries and not repo

21-09-2015 11/26/2015 3 Unconfirmed coinsurance balances due from o21-09-2015 11/26/2015 4 Zero value for calculation of solvency margin 21-09-2015 11/26/2015 5 ageing of outstanding reinsurance balances r21-09-2015 11/26/2015 6 Share application money of foreign partner co21-09-2015 11/26/2015 7 Incomplete details of Insurers' Agents in reco21-09-2015 11/26/2015 8 Issues in Solicitation of Business

21-09-2015 11/26/2015 9 Issues in Solicitation of Business

21-09-2015 11/26/2015 10 Issues in Solicitation of Business21-09-2015 11/26/2015 11 Issues in Solicitation of Business

21-09-2015 11/26/2015 12 Lack of infrastructure to maintain proper rec21-09-2015 11/26/2015 13 improper proposal for insurance

21-09-2015 11/26/2015 14 Issues in Solicitation of Business21-09-2015 11/26/2015 15 Lack of proper infrastructure to ensure check

21-09-2015 11/26/2015 16 Improper Advertising Strategies21-09-2015 11/26/2015 17 Improper Advertising Strategies21-09-2015 11/26/2015 18 Filing of standardised script in only 3/5 produ21-09-2015 11/26/2015 19 Outsourcing of control functions21-09-2015 11/26/2015 20 Discounts on Premium beyond limit and ommis

21-09-2015 11/26/2015 21 Issues with add-on covers21-09-2015 11/26/2015 22 Incomplete/improper proposal for insurance21-09-2015 11/26/2015 23 Invoice of Vehicles not collected21-09-2015 11/26/2015 24 Misquoted terror risk premium21-09-2015 11/26/2015 25 Outsourcing of control functions and involvem

21-09-2015 11/26/201526 and 27 Lack of proper infrastructure to maintain che21-09-2015 11/26/2015 31 Payments to master Policyholders21-09-2015 11/26/2015 28 Quoted premiums not in line with acturial pri

21-09-2015 11/26/2015 29 Non-compliance with F&U guidelines of group

21-09-2015 11/26/2015 30 Lack of proper infrastructure to ensure check

21-09-2015 11/26/2015 32 Sum insured and term of the policy decided b

21-09-2015 11/26/2015 33 Repudiation of claims for non-submission of

21-09-2015 11/26/2015 34 Delays in dispatching policies

21-09-2015 11/26/2015 35 Issues with settling of claims

21-09-2015 11/26/2015 36 ls of settlement not entered in the data base

21-09-2015 11/26/2015 37 Lack of proper infrastructure to maintain che21-09-2015 11/26/2015 38 Appointment of in-house unlicensed surveyo

10/28/2015 11/30/2015 1 Directorship with other corporate agents

10/28/2015 11/30/2015 2 Non-disclosure of outsourced activities10/28/2015 11/30/2015 11 Payment of more than stipulated commission 10/28/2015 11/30/2015 14 wrongful disclosure of payouts made to the in10/28/2015 11/30/2015 3 Manual updation of process of credit rating of10/28/2015 11/30/2015 4 Use of wrongful advertisement practices10/28/2015 11/30/2015 20 Specimen copies of advertisements not maint10/28/2015 11/30/2015 5 Non-compliance with expenditure limits on d10/28/2015 11/30/2015 6 Improper disclosure in books of accounts10/28/2015 11/30/2015 7 Wrongful methods for advertising10/28/2015 11/30/2015 8 Zero value for calculation of solvency margin 10/28/2015 11/30/2015 9 Issues in Solicitation of Business10/28/2015 11/30/2015 13 Lack of proper infrastructure to maintain chec10/28/2015 11/30/2015 10 Issues in Solicitation of Business10/28/2015 11/30/2015 12 Payment made to other than the licensed hol10/28/2015 11/30/2015 15 Discounts on Premium beyond permissible lim10/28/2015 11/30/2015 16 Delay in refunds made for policies cancelled u10/28/2015 11/30/2015 17 Missing cover notes10/28/2015 11/30/2015 18 Incomplete data base10/28/2015 11/30/2015 19 Lack of proper communication to the policyho10/28/2015 11/30/2015 21 Outsourcing of core activities10/28/2015 11/30/2015 32 Issues in settlement of claims10/28/2015 11/30/2015 22 Refunds made in favour of dealers10/28/2015 11/30/2015 23 Headlight Assembly treated as "other parts"10/28/2015 11/30/2015 24 Lack of proper infrastructure to maintain chec10/28/2015 11/30/2015 25 Incomplete/improper proposal for insurance10/28/2015 11/30/2015 26 No adequate and sufficient provision for cla10/28/2015 11/30/2015 27 Important Terms and Conditions/other detail10/28/2015 11/30/2015 28 Cover granted not as per filed version of the 10/28/2015 11/30/2015 29 Missing details from the schedule/endorsemen10/28/2015 11/30/2015 30 Premium amount missing from certificate of 10/28/2015 11/30/2015 31 Changes in the coverage, terms and conditions10/28/2015 11/30/2015 33 Settlement of claims in cash by the group orga10/28/2015 11/30/2015 34 Admin charges not in line with the premium

2/12/2016 3/15/2016 1 Payment of more than stipulated commission 2/12/2016 3/15/2016 2 Outsourcing of core activities and payments2/12/2016 3/15/2016 3 Headlight Assembly treated as "other parts" a2/12/2016 3/15/2016 4 Discounts offered beyond permissible limits2/12/2016 3/15/2016 5 Lack of proper infrastructure to maintain chec2/12/2016 3/15/2016 6 Reinsurance Placements were made with Reinsu2/12/2016 3/15/2016 7 Incomplete database and lack of proper infra7/11/2015 10/5/2015 1 The Chief Investment Officer (CIO) and Chief7/11/2015 10/5/2015 2 No whistle-blower policies7/11/2015 10/5/2015 3 Use of wrongful and loss making business prac7/11/2015 10/5/2015 4 Issues in Solicitation of Business7/11/2015 10/5/2015 5 Issues in Solicitation of Business7/11/2015 10/5/2015 6 Use of unlicensed agents in procurement of b7/11/2015 10/5/2015 7 Sanction of authority to regional office in-cha7/11/2015 10/5/2015 8 Discounts offered beyond permissible limits

7/11/2015 10/5/2015 9 Delay in processing claims7/11/2015 10/5/2015 10 No segregation between mid-office and back o7/11/2015 10/5/2015 11 The ‘Employee dealing guidelines/trading guide7/11/2015 10/5/2015 12 no segregation of the functions of the fund 7/11/2015 10/5/2015 13 Lack of proper infrastructure to maintain che7/11/2015 10/5/2015 14 insurer’s systems not configured to automati7/11/2015 10/5/2015 15 no system based report for daily cash manag9/22/2015 11/16/2015 1 Outsourcing of core activities and payments9/22/2015 11/16/2015 2 Issues in Solicitation of Business9/22/2015 11/16/2015 3 Payments made to group organisers9/22/2015 11/16/2015 4 Issues due to delay in settlement of claims

NA 28.07.2015 1keted without an approval from the regulatorNA 28.07.2015 2N certified by CEO as required by the guidelinesNA 28.07.2015 3 Delay in issuance of ID Cards to the policyholNA 28.07.2015 4 rawal of policy despite the regulators' ordersNA 28.07.2015 5 by different operating offices of the insurer

7/3/2015 9/9/2015 1 in BOD of corporate agents and insurer board7/3/2015 9/9/2015 2 ctivities and issues in solicitation of business7/3/2015 9/9/2015 3 Payments made over and above the commissi7/3/2015 9/9/2015 4 Issues in Solicitation of Business7/3/2015 9/9/2015 5 Non compliant terms and conditions of the a7/3/2015 9/9/2015 6 make payments over and above commission7/3/2015 9/9/2015 7 10% of the total reinsurance premium given up7/3/2015 9/9/2015 8 Issues with calculation of solvency margin7/3/2015 9/9/2015 9 wrongful disclosure of payouts made to the c

8/14/2015 9/24/2015 1 inconsistency between the payment data furn8/14/2015 9/24/2015 2 Issues in Solicitation of Business8/14/2015 9/24/2015 3 Agreements to make payments over and abo8/14/2015 9/24/2015 4 payment of commission to referral entities8/14/2015 9/24/2015 5 Non-submission of documents and Issues in Sol8/14/2015 9/24/2015 6 Issues in Solicitation of Business8/14/2015 9/24/2015 7 Issues with terms and conditions of the agr8/14/2015 9/24/2015 8 Incomplete database and treatment of headlig

Charge_description Regulation_violated Violation_amount Violation_descriptiThe insurer paid significant am Clause 9.3, 9.9 (iv),11.2 and13 Gu NA

Payments made to the intermediaPart 2 of Annexure 3 of circular N 414.85 lakhs

Coinsurance balances due from IRDA circular 12/IRDA/F&A/CIR/Ma 99 lakhsThe value placed on 'Leasehold Para 2(1)(e) of Schedule I of IRDA ( 5.73 croresIn the Form-AA statement of assPara 2(1)(h) of Schedule I of IRDA ( NAThe insurer had considered 'ShaIRDA (Assets, Liabilities and Solven NAThe register of Agents maintaine NA

Regulation9(2)(ii)(a)ofIRDA(Licens NA

It was observed that the insure Authority'scircularIRDA/CIR/011/2 NA

The insurer further authorized circular IRDA/CIR/011/2003, dated NAClause 6 of Annexure II of IRDA G NA

It is also observed the insurer Sec. 64 VB (1) and (4) of Insurance NANA

The referral partners engaged byGeneral provisions of Reg. 9(a) of NAThe insurer did not put in plac Regulation 11 (8) of IRDA (Sharing NA

It was also observed the insure Reg. 11 (11) of IRDA (Sharing of da 74 lakhsThe insurer did not file any ad 3 (1) (ii) to (v) of IRDA (Insurance NA

Provision of clause 6, clause 9.1 a NAIt is observed that the policy d Clause 6 of Annexure II of IRDA G NAThe insurer offered discounts oPara 2 of Circular No. 021/IRDA/F NA

Clause 11 of File & Use Guidelines NAIn case of Motor TP & Package p4(5) of IRDA (Protection of Policy NAIt is observed from motor packagGR-8 of IMT 2002 NAThe terrorism risk premium was Para 6 of File & Use Guidelines (Ci NAThe cover notes books were issuClause 14 of Reg. 21 of IRDA (Insu NA

The insurer did not confirm the NAThe insurer made payments to v NAIt was noted that the premiums Clause A (1) of Guidelines of Group NA

Citical illness cover extended a IRDA/NL/CIR/F&U/003/01/2011, Point NA

Para C(7) and C(11) of Group Insur NA

Para C (1) of Group Insurance Guide NA

Proper mechanism was not put in NA

The inward register of policy d Reg. 4(6) and 4 (1) of IRDA (Prote NA

It was noted that the insurer haGR.8 of IMT 2002 NA

The acceptance of offer of settl9(6) of IRDA PPI Regulations, 2002: NA

Section 33 ( 3) of Insurance Act, 19 NAThe insurer appointed the in-h Section 64UM (2) of Insurance Act, NA

It was observed that the Direct Regulation 9 (2) (ii) (k) IRDA (Co NA

Provisions of Sec. 43 (1) of Insurance Act, 1938 and Provisions of Reg. 8(1) (ii) (a) of IRDA (Licensing of Insurance Agents) Regulations, 2000No mechanism in place to ensure that the Corporate Agents engaged by the insurer have adequate number of Specified Persons,vis-a-vis the volume of business procured by the Corporate Agents and their geographical distribution. Also, there are instances that proposals are signed by insurance executive who are not specified persons of corporate agents

The premium register indicates that policies were solicited by “Support Direct India Pvt. Ltd.”, however, the proposals were signed by the various persons relating to M/s. Appco Marketing Pvt. Ltd., (a Corporate Agent of the insurer)

It was observed that the insurer did not obtain the proposals for issue of policies as required under the provisions of Reg. 4(1) of the IRDA (Protection of Policyholders' Interests) Regulations, 2002. The name of the intermediary was not printed on the policy schedule Reg. 4(1) of the IRDA (Protection of Policyholders' Interests) Regulations, 2002 and Authority's Cir. No. IRDA/CAD/CIR/ AGNI137/ 08/2010

The insurer solicited business in distance marketing mode under five products. However, the insurer had filed the standardized script for the Distance Marketing only with regard to three products

It was observed that bundling of the benefits including add-on covers were offered resulting in mis-selling of the product. Moreover, the product offering in units and bundling was not filed with the Authority for approval. In case of CGL policies, the rating filed by the insurer for 'loading for turnover' was in a range of '0.02 % to 0.05 %' of turnover. However,it was observed in the case of sample policies that the rate for turnover applied by the insurer was far below the 0.02% which was the minimum rate. The Insurer sold any 'Special Contingency' policies although the same was not approved. In case of motor package policies, 'portfolio discount' and 'special discount' were allowed which were not as per the filed product. Also,the premium for add-ons was not shown separately for each add-on in the policy schedules

Clause A(2) and C(1) of Guidelines of Group Insurance Policies and Clause A(3) of Guidelines of Group Insurance Policies para C-4 of Authority's Group Insurance Guidelines

The insurer did not put in place any mechanism to ensure that the master policyholder had the mandate of the members covered and did not issue Certificate of Insurance with regard to members covered under non-employer employee group insurance policies issued. The claims settled with regard to Group Health policies, and Group Personal Accident policies issued to all non-employer-employee groups, the payments were made to the master policyholders by drawing a cheque in the name of master policyholder and did not put in place any mechanism to ensure that the payments were settled by the master policyholder to the beneficiaries of the insured members.

It was observed that the sum insured offered to various members in a specific group personal accident policy was varying between Rs. 25,000 to Rs. 1,00,000 without any pre determined basis. Similarly, the insurer offered long term policies ranging from 1 year to 5 years without any basis. The term of the policy is as per the period of deposit

IRDA/HLT/Misc/CIR/216/09/2011, clause 6 of Corporate Governance Guidelines(IRDA/F&A/CIR/025/2009-10 dated 05.08.2009)

No mechanism in place to ensure that the Corporate Agents engaged by the insurer have adequate number of Specified Persons,vis-a-vis the volume of business procured by the Corporate Agents and their geographical distribution.

96773419It is observed from the Form 31Authority circular no. 11/IRDA/Bro NAIt is observed that the insurer para 8.4 of Outsourcing guidelines 0.49-16.09 LakhsIt was observed that the processAnnexure III Para C (3) (Mid Offic NA

Clause 8.4 of Guidelines on Outsou 4.23 croresThe insurer had not maintained NAThe data Processing and outsourClause 6 of Guidelines on Corpora 167.08 croresIt was observed that the insure IRDA Circular No. 067/IRDA/F&A / 7.32

Authority directions given in circ 10.84 LakhThe insurer had capitalized the Schedule I (valuation of assets) of 3.39 croresThe insurer had close to 400 moAuthority'scircularIRDA/CIR/011/2 NA

Authority’s circular IRDA/CIR/011/ 4.29 lakhsAuthority’s circular IRDA/CIR/011/ NA

The insurer had issued individu Reg. 2 (e) to be read with Reg. 2 185 lakhsThe insurer allowed discounts NAIt was observed from the data o NAThe instances of missing cover nClause 6 of Guidelines on Corpora NAThe insurer is not maintaining tRegulation 4(6) of IRDA (Protection NAThe insurer was recording the i 4(4) of IRDA (Protection of Policyho NA

Para 2(1) (i) read with para 2(1) ( NApara 9.12 to be read with para 8.4 NA

NAIn one of the provision / clause General Regulation 9 on ‘depreciat NAThe insurer was offering additi Para 6 of the Authority’s circular NAIn 15 policies out of a sample Authority’s circular no. IRDA/CAD NAFrom top 10 claims paid, there IRDA (Asset Liability Solvency Marg NAThe unnamed policy was issued c NA

Para 11 of IRDA circular referenc NAIt was observed that underwritiRegulation7 (i) of IRDA (Protectio NAThe insurer had not mentioned tClause no. 7 of Authority circular NA

Para 11 of IRDA circular reference NAClause no. 22 of Authority circula 27.12 croresIRDA circular reference IRDA/LIF NAAuthority circularRef.011/IRDA.Br NA

On examination of the agreement NAOn examining the insurer agreemePara 9 of F&U guidelines dated 28/ NA

NAThe insurer did not put in place NAReinsurance Placements were ma NAOn examining the insurers investment operations, it is noticed tha NAThe Chief Investment Officer (C NAThe insurer does not have a whis NA(a) The insurer issued circular NA

NATwo of the Corporate Agents hav NAThe insurer is procuring busine IRDA circular ref. IRDA/Cir/011/20 NAAs per schedule of rates effecti NAInsurer is offering additional Para 15 (c) of Authority’s File & U NA

The insurer engaged T V Sundram Iyengar & Sons Limited which is acting as Corporate Agent for Data processing and policy servicing and paid Rs. 64,012,257/- in 2011-12 and Rs. 30,361,162/- in 2012-13(till Dec 12). Similarly, Sundaram Finance Ltd, the promoter and Corporate Agent has also been engaged for tax advisory services and was paid Rs. 12 lacs each in 2011-12 and 2010-11. The same was not declared under outsourcing activity. IRDA circular 011/IRDA/Brok-Comm./Aug.8 dated 25-08-2008, Point 21 of Authority Circular – 017/IRDA/Circular/CA Guidelines/2005 dated 14.07.2005 read along with Section 40 (A) of Insurance Act,1938 11.2 of Guidelines on outsourcing of activities by insurance companies (IRDA/LIFE/CIR/GLD/013/02/2011 dated 01.02.2011) and Clause number 8.4 of guidelines on outsourcing of activities by insurance companies (IRDA/LIFE/CIR/GLD/013/02/2011 dated 01.02.2011)

The insurer’s advertising and publicity expenses for the year 2011-12 was Rs.4.23 crore against Rs.1.52crore of FY 2010-11 which shows a rise of 178%. On further examination of the expenses, it was observed that Rs. 2.28 crore had been booked for distribution of advertisement material and paid to auto dealers and individuals. There was also an agreement for such kind of arrangement but there was no service charge fixed as well as vouchers were not containing any information on number of items distributed and rates at which payment made. This practice showed that insurer is paying remuneration for procuring businessRegulation 3(1) (iii) of IRDA (Insurance Advertisements and Disclosure) Regulations, 2000

The insurer paid Rs.10.84 Lakh to its related party entity i.e. Sundaram Finance Ltd. The above mentioned payment pertains to the calendar printing cost. The calendar printed belongs to the group in which on the two months’ page the insurers name is printed.

As per insurers system the license number was mandatory field while generating an agent code. However, it was noted that to generate the agent code, the insurer in few cases used dummy IRDA license number and its expiry date and in other instances, no license number / license period for the purpose of process of generating agent master was mentioned. Thus, the insurer had no proper and adequate controls on the generation of agency master in its system. The insurer had also sourced the business from unlicensed persons / entities and payouts are made under the accounting head commission and others. The insurer solicited and procured insurance business through Mr. Rajan Duggal and paid Rs.4.29 lakhs to Mr. Duggal in the financial year 2011-12 towards insurance commission and other payments. It is pertinent to note that Mr. Duggal obtained IRDA license no. 1541824, w.e.f. 03-01-2013.From the list of CIEs / SPs of corporate agent that some corporate agent’s have only 1-3 CIE/SPs, who were authorized to solicit and procure insurance business. Regardless of the number of CIE/SP available for the C.As, the insurer had allotted multiple online accesses to its policy administration system or enabled sourcing of business through the persons who are not authorized to solicit and procure insurance business. Further, it was noted from the details of branches of M/s. T V Sundram Iyengar & Sons Ltd duly signed by CIE that it had 94 branches in the state of Tamil Nadu and Kerala

Circular No. 021/IRDA/F&U/Sep. 06, dated 28-9-2006 and Circular No. IRDA/NL/Cir/F&U/003/01/2011 dated 6th Jan, 2011Clause 6 of Guidelines on Corporate Governance for the insurance sector. (IRDA /F&A/CIR/025/ 2009-10 dated 05.08.2009)

The insurer had entered into agreements with M/s. Tata Motors Ltd, M/s. Ford India Pvt. Ltd. and M/s. Honda Cars India Ltd. The Tata Motors Ltd was the tripartite agreement between the insurer, Tata Motors Ltd. (TML) and M/s. Tata Motors Business Support Services Ltd. (TBSS). From the provisions of the agreement it is evident that the Insurer has outsourced core activities like allowing third parties for deciding premium rates, to do survey and assess loss etc.It was noticed that the insurer The BASIX was a corporate agent of the insurer. BASIX and KBSLAB were the policy holders and group organizers for GAR policies. The GAR product was sold to the customers who avails loans from BASIX / KBSLAB. The entities i.e. BASIX, KBSLAB and BASIX were the sister concern / group companies. Thus, the insurer had entered into agreement / outsourced the servicing of claims etc. with the sister concern / group organizers of the insurance policies. As per para 1.2.3 of the agreement between the insurer and the BASIX, it was evident that BASIX was supposed to provide the Claim Servicing in Health Insurance. It was observed that the BASIX the C.A. and the group organizer is processing the claims GAR policies and forwarding the same to the insurer for payments. The insurer settles these claims viz. Hospital Cash, Permanent Total Disablement, Live Stock, GAR Accidental Expenses, Micro Enterprises etc. in favour of the C.A. / Group Organizer i.e. M/s. BASIX or M/s. KBSLAB.In one of the provision / clause of the agreement with TML/TBSS and HSCIL, it is mentioned that the refund of the premium will be made in favour of the Dealer where the payment towards premium has been received from the Dealer and in other cases to the Customer.Sec. 64VB (3) of Insurance Act, 1938 and Clause 6 of Corporate Governance guidelines (IRDA/F&A/CIR/025/2009-10 dated 05.08.2009)

Regulation 7 (j), (m) & (p) of IRDA (Protection of Policy Holders Interest Regulations),2002 and Para 11 of IRDA circular reference 021/IRDA/F&U/Sep.06 dated 28.09.2006It was also observed the insurer had issued GPA policies to primary card holders of Citibank N.A. The policy nos. was PACITI0014000105, PACITI0013000105 and PACITI0007000108. The title of policy was “GPA policy schedule, Accidental Death and Disablement Only”. The said cover granted was not as per filed version of the product.

It was observed that the insurer has designed a plan Gramin Arogya Raksha (GAR) Policy to the customers availing loan from Bharatiya Samrudhi Finance Ltd. (BASIX) who was also a Corporate Agent (CA) of the insurer with the IRDA C.A. license no. 1524864. As per letter dated 18-07-2005, the insurer had filed this one-off plan named “Gramin Arogya Raksha” with the Authority. The approval for the said filing was not made available by the insurer for examination. “The enhancement of the packages since beginning had been done without any additional cost to the insured person considering the favorable claims experience.” It was noticed from the above data that insurer had made several changes in the coverage, terms and conditions, wordings, etc. for the product in subject. As per the insurer letter dated 18-07-2005 filing the GAR product and as per underwriters signoff, the said ‘GAR’ product was filed as one-off product to be issued to the customers availing loan from BASIX. As per underwriters signoff the product was to be marketed only for BASIX. It was noted from policy no. RGAR000019000100 that the GAR policy was sold to other than BASIX i.e. to M/s. Krishna Bhima Samruddhi Local Area Bank Ltd. (KBSLAB). The insurer had also made changes in the coverage, terms and conditions, wordings, etc. of the policy for KBSLAB;It was observed that the C.A. / Policy Holder / Group Organizer is settling the insurance claim in cash. In the year 2005-06 till 2012-13 (upto Dec. 12) the claims amounting to Rs. 2712.04 Lakhs were settled in cash through M/s. BASIX, the C.A. of the insurer. The claim amount was settled in favour of C.A. / Policy Holder / Group Organizer i.e. M/s. BASIX or M/s. KBSLAB; in turn group organizer is settling the claim in cash.It was noted from the certificates of insurance that C.A./Policy Holder / Group Organizer had charged Admin Charges ranging between “Rs. 135/- to Rs. 108/- per annum to the insured / member for providing the life and health coverage.” The details of per insured / member wise admin charges collected (considering the lowest admin fee of Rs.108/-, per member) for the period 2011-12 and 2012-2013 (upto Dec. 12) for the policies issued to M/s. BASIX were calculated on the basis of group size of the policy at the time of commencement of policy. The premium under above mentioned policies is Rs. 15.57 Crs and Rs. 2.34 Crs in 2011-12 and 2012-13 (upto Dec.12) respectively, while the collection of administrative charges by BASIX was Rs. 21.29 Crs and 8.61 Crs which were substantially high compared to premium amount.Insurer is paying additional payouts over and above commission to M/s Maruti Insurance Business Agency Ltd and to M/s Hero Corporate Services Ltd on the motor premium solicited through the two corporate agents. Additional payouts to the licensed entities are referred by insurer as reimbursement towards infrastructure costs.

7(c) of IRDA (Registration of Indian Insurance Companies) Regulations, 2000 and Clause 6 of corporate governance guidelines of Annexure II of circular no.IRDA/F&A/Cir/0205/2009-10

The insurer has issued revised underwriting guidelines on de-Tariff market rates and delegated to Regional Offices, the power to sanction total discount of up to 85% on erstwhile Fire & Engg tariff rate without any scientific basis. It was informed that, this decision was based on Market Competition. The insurer’s R.O. II Delhi, has allowed a business procurement discount of 12.50% and de-tariff discount of 75% to M/s. Pragati Power Corporation Limited as against the maximum permissible limit of 51.25 %. para 1, 3(ix), 8 & 11 of F&U guidelines dated 28th Sep, 2006circular No. 39/IRDA/AML/CIR/FEB-09, dated 4-3-2009 and para 3 of circular no: 022/IRDA/MasterAML/Nov-08 dated 2nd Dec, 2008.Regulation 3(7) of IRDA (General Insurance – Reinsurance) Regulation, 2000.

Provision 9(1) of IRDA (Investment Regulations) 2000 and also Para 7.2 of Annexure II of Corporate Governance guidelines circular no.IRDA/F&A/Cir/025/2009-10 dated 5-8-2009.point 13 of annexure II of the Corporate Governance guidelines circular no.. IRDA/F&A/CIR/025/2009-10, dated 5-8-2009Point 3(ix), 8 & 11 of F&U guidelines dated 28/09/2006 and circular ref.no. IRDA/CIR/011/2003 dated 27-03-2003.

The insurer has five Corporate Agency tie-ups with banks during 2009-10. As per the bancassurance statement, it is noted that three banks i.e Corporation Bank, Central Bank of India, Catholic Syrian Bank doesn’t have a single specified person but still procuring significant business through their hundreds of branches. It is evident that the policies procured by these corporate agent banks are through non-specified persons.Regulation 9(2) (ii) (a) of IRDA (Licensing of Corporate Agents) Regulations, 2002, para 2, 8 & 17 of Authority guidelines ref.no.17/IRDA/cir/AC guidelines/2005 dated 14-07-2005 and IRDA circular ref. IRDA/Cir/011/2003 dated27.03.2003.clause 6under Annexure II of Corporate Governance guidelines issued by Authority vide circular: No. IRDA/F&A/CIR/025/2009-10, dated 5-8-2009.

para 3 (ix), 8 & 11 of F&U guidelines dated 28/09/2006.

On examining sample claim files NAMid office and back office inve Point A (1) of Annexure III of IRD NA

Point A (2) of Annexure III of IRD NAThere is no segregation of the NA

NAThe insurer’s systems are not c point D (5) of Annexure III of IRD NAThere is no system based repor NA

NANA

1,310,43024 lakhs

File and Use Guidelines NAAs such the company did not fil4(a) of IRDA (Health Insurance) reg NA

9(e) of Health Insurance Regulatio NAThe Insurer has submitted a lis 4(a) of Health Insurance Regulation NAIt was complained that one of the insurers' operating offices has NAOut of the seven members of the 9(2)(ii)(k) of IRDA (Licensing of co NAThe corporate agent M/s ITIS is Clause 2, 17 and 21 of IRDA circula NAThe company entered into two agClause 21 of corporate agent guidel NAInsurer has entered into an Age9(1)(d&e) & 9(2) )ii) of IRDA (Lice NAM/s. ITGI entered into an MOU w NAInsurer entered into MOUs with point 1 and 10 of IRDA circular ref NAOn verification of class-wise r 3(9) of IRDA (General Insurance Re NAThe insurer is showing an amoun2(1) (h) of IRDA (Assets, Solvency 485.63 croresThe insurer is making payments Clause 21 of corporate agent gui 57.46 Lakh(a) the company's board consideAuthority circular no. 11/IRDA/Bro NAFrom the available documents itAuthority circular no. 11/IRDA/Br NA(a) The sample copies of voucheCircular no. 011/IRDA/Brok-comm/ NAThe company has 15 referral arrRegulation 11 (7 -12 & 14) of IRDA NAThe details of specified personsRegulation 3,4,5,6 of IRDA (Licens NAInsurer is booking the business IRDA circular ref. IRDA/Cir/011/20 NAThe insurer had entered in to a IRDA/CIR/011/2003, dated 27-03-200 NAOn examination of two national Para 9 of the F&U guidelines dated NA

9(1, 5 & 6) of IRDA (Protection of Policyholders’ Interests) Regulations, 2002 and Clause 6 of Annexure II of Corporate Governance guidelines circular no.IRDA/F&A/Cir/025/2009-10 dated 5-8-2009.

The ‘Employee dealing guidelines/trading guidelines’ are not in place. Insurer has ‘Code , conduct and Discipline rule 2003’ applicable to all the employee in general and it does not prevent the investment persons from taking the advantage of insider information available to them.Point B (1) (a & c) of Annexure III of IRDA (Investment) (Fourth Amendment) Regulations, 2008 issued vide circular no.INV/Cir/008/2008-09 dated 22-08-2008

It was observed that investment system has no inbuilt checks in place for calculating exposure/ prudential norms, as such; system cannot signal the internal/regulatory breaches prior to taking such exposure. As informed Investments limits are monitored manually through spreadsheets at the time of each investment.para B (2), C.1.b, C.3.b, C.4.a & C.5.a of Annexure III of IRDA (Invt) (4th Amendment) Regulations, 2008.

point C (2)(a) of Annexure III of IRDA (Investment) (Fourth Amendment) Regulations, 2008 issued vide circular no.INV/Cir/008/2008-09 dated 22-08-2008.Insurer instead of using its own portal has entered into an agreement to use the portal of Hero Corporate Services Ltd (HCSL) who is also a corporate agent of another general insurer. Insurer agreed to pay one time upfront payment of Rs.30 lacs and monthly subscription fees on the basis of usage of the portal. The Insurer was paying 33% service charges on the premium amount directly to HCSL. Further, it is also observed from sample MOU copies that no entity/motor dealer with which insurer has entered into agreement is a licensed entity by the Authority, still the insurance commission and infrastructure charges are paid to the dealers by the regional offices in the range of 10% to 30%. The inspection team observed that the insurer was not only paying agency commission to the agent, but also to the motor dealer as well as to the manufacturer on the same business. Such payments were observed in the case of M/s. Chevrolet Sales India Ltd. In addition, the insurer has also entered into service agreement with M/s. Magma CF Services Pvt. Ltd., Kolkata, by which M/s. India Autoinsure Solutions Pvt. Ltd. (a corporate agent of the insurer) is offering motor and general insurance related services. Vide para 4(a) of the above agreement the insurer had agreed to pay 37% and 27% for private and commercial vehicles respectively in addition to 10% corporate agent agency commission. Further on examining the documents it is also noted that insurer has outsourced core activities to motor dealers, payments were made to dealers as a % to premium, amounts paid to motor dealers were under commission head, payouts to Dena bank was towards marketing of products, charged different rates to similar risks sourced through different dealers of the same manufacturer and negotiated service charges payable to dealers based on the discounts offered to customers. (b) Insurer entered into agreements with various motor manufacturers / dealers and payments are made as a percentage of Motor O.D Premium over and above the commissions’ payable to the intermediaries. Payments are being made from the respective regional offices where the entities are located and details of the same are not available at the H.O. As per the provisions of the agreement the payment is fixed at 33% of the Motor O.D Premium. Apart from the Automobile Dealers / Manufacturers, it is observed that the insurer has entered into agreement with some banks including Dena Bank to whom the payments are made under the head “Infrastructure Expenses”. It is noticed that the rate of “infrastructure expenses” agreed for payment to motor dealers is indirectly proportional to the “Discount offered on IMT to the client”. It is also noticed that though the motor dealers are not licensed as insurance agents, they are under obligation to collect the premiums and maintain a C.D account with the insurer etc.Point 3(ix), 8 & 11 of F&U guidelines dated 28/09/2006 and circularno.048/IRDA/De-tariff/Dec-07 dated 18th Dec, 2007, Circular ref.no.IRDA/CIR/011/2003 dated 27-03-2003, Commissin circular ref.no.011/IRDA/Brok-comm/Aug-08, dated 25-08-2008 and para 30 of F&U guidelines dated 28/09/2006, Regulation 3 of IRDA (Licensing of Corporate Agent) Regulation, 2002 and clause 21 of IRDA circular ref. 017/IRDA/Circular/CA guidelines/2005 dated 14.07.2005, Regulation 7 (C) of IRDA (Registration of Companies) Regulations, 2000 there were 6-7 companies that dealt in Multi Level Marketing (MLM) for a period of over nine years. These companies pay commission plus bonus to their sales officers for marketing three different group products of the insurer viz., Personal Accident Policy, Janata Personal Accident Policy and Nagrik Suraksha Policy. The business procured by these companies is booked under the agency of an Individual agent.Authority guidelines given vide circular ref.no.IRDA/CIR/ 011/2003 dated 27-03-2003On examining the Certificates of Insurance issued for the Oversees Mediclaim Policy issued by Karvat group policyholder, insurer has not specified the Insurance premium and service tax but has only stated the full amount paid by group member to Karvat towards insurance and other membership charges. This may mislead the Insured person to believe the amount stated in COI to be the premium paid to OIC. The insurer paid additional amounts to the Group Organizer towards the infrastructure costs in addition to the normal commission to the Agent. In the Karavat group policy, no pre-numbered certificate forms are supplied by the Insurer to the group organizer. No surprise inspection is conducted nor a certificate from the Auditors is obtained annually by the insurer. During last 4 policy years the insurer has inspected the Group Organizers office only once. nfrastructure Expenses were paid to the agents vide Ch. No. 513803 dated 31.02.2008 amounting to Rs. 13,10,430/-point C (4,7,8 & 11) of Authority Guidelines on Group Insurance Policies issued vide circular Ref. 015/IRDA/Life/Circular/GI Guidelines/2005 and Authority circular no.11/IRDA/Brok-comm/Aug-08M/s. Karvat Travels Pvt Ltd., have claimed that they have paid various claims to the insured persons due to the delay in payment by TPA/OIC and sought reimbursement of Rs. 24 Lakhs approximately from Heritage TPA. Clause C-7 of Group Insurance Guidelines, 2005 andClause 6 of Annexure II of IRDA Guidelines on Corporate Governance Circular no. IRDA/F&A/Cir/025/2009-10 dated 05/08/2009After the Notification of HIR 2013 in February 2013, it is imperative on the part of the Insurer to get the product filed within the timelines and to market only on getting the approval of the said Product from the IRDAI. The insurer had sent an email dated 28th March 2014 enclosing the Mediclaim Insurance policy (1996) seeking UIN for the product. The Insurance Regulatory and Development Authority of India has informed vide its email dated 05th December 2014 that this product may be treated as deemed withdrawn product. No certificate was filed for UIN, but Mediclaim Insurance Policy 1996 was marketed

Delay in issuance of ID Cards to the policyholder: The Complainant claimed that the ID Cards were not issued in time, in spite of his request for issuance of ID cards within the time frame for the last 2 years. It is found that ID cards were issued in December 2014 after lapse of considerable time

Section 64UM of Insurance Act, 1938, General regulation 9 on 'depriciation' of Indian Motor Tariff Wordings, Point 1,2 and 28 of F&U guidelines dated 28/09/2006, Authority circular ref. no. IRDA/NL/CIR/F& U/073/11/200 and Point 8 of Authority circular ref. no. 048/IRDA/De-tariff/Dec-07, Regulation 11(14) of IRDA (Sharing of Database for Distribution of Insurance Products) Regulations, 2010 read with circular: No. IRDA/Life/Misc./Cir./125/08/2010 and No. IRDA/Life/Cir/Misc/126/08/2010

Guilty(Y/NPenalty(amt.) Other_action Rationale Order_signatoryN Nil Submission regarding the correc VR Iyer

Y 500,000 The insurer had made payments t VR Iyer

N Nil No charges pressed further Insurer had reconciled co-insur VR IyerN Nil No charges pressed further VR IyerN Nil No charges pressed further VR IyerY Nil The Authority directed the insu VR IyerY 500,000 Solicitation of insurance busines VR IyerY Nil The insurer is directed to mandate the corporate agent to provi VR Iyer

Y

500,000 Insurer is procuring insurance business through the entities which are not licensed as per Insurance Act

VR Iyer

Y VR IyerY Nil No charges pressed further VR Iyer

N Nil No charges pressed further Authority noted that in cases o VR IyerY Nil No charges pressed further A complete proposal form is the VR Iyer

Y

500,000

VR IyerY VR Iyer

Y VR IyerN Nil No charges pressed further The insurer submitted that they VR IyerN Nil No charges pressed further The distance marketing guidelin VR IyerY Nil The insurer is required to maintain the policy wordings of each VR IyerY

500,000

VR Iyer

Y Authority has noted that the ins VR IyerN Nil No charges pressed further The insurer submitted that the I VR IyerN Nil No charges pressed further VR IyerN Nil No charges pressed further Insurer submitted that the terr VR IyerN Nil No charges pressed further VR Iyer

Y500,000 The insurer has violated the def

VR IyerY VR IyerY Nil No charges pressed further VR Iyer

Y 500,000 The insurer has offered a critic VR Iyer

N Nil No charges pressed further Insurer submitted that whereve VR Iyer

N Nil No charges pressed further VR Iyer


Y Nil Issue of Warning The insurer’s submissions seem VR Iyer

N Nil No charges pressed further The insurer submitted that in al VR Iyer


Y Issue of Warning VR IyerN Nil No charges pressed further The insurer submitted that in r VR Iyer


Taking the value of “Leasehold improvements” as “zero”, did not have major impact on solvency marginThe Company has now strengthened the internal process to check the solvency calculation in addition to the audit check points. The insurer assured the Authority that such type of mistake would not be repeated in future. The insurer further submitted that even after considering the disallowances in excess of 90 days, the solvency position along with observation 18(a) would dip to 1.74 times compared to the regulatory limit of 1.5 timesIt is observed that insurer has received the foreign partner’s money towards share capital on 13.01.2012 and 28.03.2012. The insurer has considered the entire share holder’s application money while arriving at available solvency margin as on 31.03.2012, where as only a part was being received from the foreign partner. As a prudent measure this money need to have excluded while calculating the solvency ratio as on 31st March, 2012. For example, If the money would not have been considered, the solvency ratio would be 1.1% as against 1.69% as reported in Form KG as on 31st March, 2012

The proposal forms are signed by the other corporate agent who is not authorized to sign the said proposal forms. This shows the inadequate internal control while dealing with proposal forms at insurer’s end. However, the entire process of collection of proposal forms till submission to the Company was reviewed and effective controls are put in place to comply with the provisions and regulations. The Company has also reviewed the process of collection of proposal forms with our Corporate Agent M/s. Appco Marketing Pvt. Ltd and has centralized the policy issuance process at our Head office

The officials of referral entity have physically signed the proposal forms of the insurer. This amounts to procurement of new business by referral entities the insurer has paid the remuneration on the database converted into sales more than once during the referral arrangement period and the referral fee was paid to these referral entities, as many times as the policies were issued on the same client

It is observed from the “F&U” documents furnished for Fire Insurance that there is no provision of special discount on and above additional claim ratio discount. From the annexure, it is observed that the insurer has applied special discount over and above IAR discount. For the Engineering policy, the insurer is applying special discount which is not a part of “F&U” of the product. The brochure of the “Motor Secure” policy does not describe all terms and conditions applied to all add-ons. In case of motor package policies, the Authority has allowed portfolio discount of 5% and additional discount of 10% as per approval letter ref: 1/RD/FGIICL/Motor/FS/07-08 dated 04.11.2007. It is observed that the insurer has offered portfolio discount of 25% and additional discount of 12% in inspection sample cases. This is in violation of “F&U” guidelines.

The insurer submitted that Cover note books are issued to Insurance Brokers having valid licensed issued by the Authority at their request for the ease and convenience of the customers, on the premise and assumption that the relevant regulations with respect to obtaining mandates from clients would had been duly complied by the brokers. They had strengthened the process to ensure that the cover notes were recovered once the license was cancelled by the Authority and confirm that all the cover notes books were recovered and reconciled. The insurer confirmed that they did not outsource this function to any broker or any unlicensed persons

The insurer did not adhere to the pricing methodology mentioned in the product F&U document

The insurer submitted that the sum insured under the policy varied from Rs. 25,000/- to 1,00,000/- for different category of people covered. Since the sum insured was nominal and didn’t have high risk exposure they had not insisted for any documentary basis for justifying the sum insured for different categories of insured persons for practical and simplicity purpose.

The insurer submitted that it was a Group JPA Policy issued to the Government of Maharashtra covering the farmers of the state. They had participated in the scheme along with other Public Sector Insurance Companies. The State Government themselves had incorporated certain points in the SLA to avoid incidences of late reporting of claims. All the points in the SLA were mutually agreed by the State Government/Insurers/Brokers to ensure that the scheme was smoothly implemented in the State of Maharashtra. The insurer had also always endeavored to insist on including clauses to comply with provisions of IRDAI Group Insurance Guidelines in various Government contracts to ensure complete compliance with the IRDAI regulations.

The insurer submitted that with regards to the observation relating to non-capturing of the date of submission of last requirement in the system, the insurer submitted that the relevant changes in the system to capture the last document receipt date had been made and implemented.

The insurer was unable to furnish the requisite records to the inspection team at the time of inspection. Due to this, the inspection team was unable to verify the settlement of claims / repudiation of claims, closure of claims, etc. under the policies. In short, the compliance of IRDA (Protection of Policyholders’), 2002 could not be verified due to non availability of records. It is also noted that the insurer has failed to provide documents as asked for other inspection observations till last day of inspection signifies that the insurer failed to fully adhere to provisions of Sec. 33 (3) of Insurance Act, 1938.

Y

500,000

VR IyerY VR IyerY VR IyerN Nil No charges pressed further The insurer submitted that ther VR IyerY

500,000VR Iyer

Y VR IyerY Nil Issue of Warning The insurers has not maintained VR IyerY Nil No charges pressed further VR IyerY Nil No charges pressed further Sundaram Finance is a Corporate VR IyerN Nil No charges pressed further VR IyerY

500,000 Insurer is procuring insurance bVR Iyer

Y VR IyerN Nil No charges pressed further VR IyerY 500,000 VR IyerY 500,000 The company has deviated from th VR IyerN Nil No charges pressed further The insurer submitted that the VR IyerN Nil No charges pressed further The insurer submitted that it VR IyerY Nil No charges pressed further VR IyerN Nil No charges pressed further It was submitted that a debit c VR IyerY

500,000 The Authority has noted that in VR Iyer

Y VR IyerN Nil No charges pressed further The insurer submitted that when VR Iyery 500,000 It is observed from the agreemen VR IyerN Nil No charges pressed further The insurer stated that they ha VR IyerN Nil No charges pressed further The insurer submitted that in re VR IyerN Nil No charges pressed further VR IyerY

500,000

VR IyerY VR IyerY VR IyerY Nil No charges pressed further VR IyerY Nil No charges pressed further. HowThe Authority is not pressing a VR IyerY Nil Issue of Warning VR IyerY Nil No charges pressed further VR IyerY 500,000 VR IyerY 500,000 Agreements entered into by the VR IyerY Nil No charges pressed further the insurer submitted that the m VR IyerY 500,000 VR IyerN Nil No charges pressed further VR IyerY Nil No charges pressed further but VR IyerY Nil No charges pressed further The insurer has submitted that VR IyerN Nil No charges pressed further The insurer submitted that The VR IyerN Nil No charges pressed further. HoThe Authority takes note of the VR IyerY Nil No charges pressed further. Ho(I) Reimbursement of expenses t VR IyerY - No charges pressed further. How VR IyerY - No charges pressed further Though commission bill was gene VR IyerY 500,000 Thus, insurer has not only acce VR IyerY 500,000 VR IyerY Nil No charges have been pressed but insurer has been directed to VR Iyer

It is observed that the insurer is outsourcing the core activities like “policy servicing “and non core activities like “data processing”, “ I-tax advisory services” to its corporate agents, banks and brokers. The insurer shall not outsource any of the core activities. Moreover, the insurer failed to report the activities outsourced to the Authority within 45 days from the date of entering into relationship. The insurer is also paying rent to the corporate agent. The insurer has also made heavy payments to such entities in addition to commission. This indicates that the insurer has entered into additional relationship with the Corporate Agent with the intend of making additional payouts

It is observed that the payments to the auto dealers are in the nature of remuneration towards outsourcing of promotional and branding activities as submitted by the insurer. It is observed that such fee are not prescribed as per the agreement but the amount to be paid is based on the business performance of the auto dealers. Although, the contention of the insurer that such activities were outsourced as per the agreement which is in line with relevant guidelines, but simultaneously such relationship violates advertisement Regulations. On examination of the annexure to the observations and the submissions made by the insurer it is observed that Rs.4.23 Crore has been paid to 180 vendors in the name of advertising/publicity. The insurer has not filed any of these advertisements/joint sales advertisements with the Authority. Further, the insurer has not retained vouchers, bills etc which shows lack of internal control, thereby violating clause 6 of the Corporate Governance Guidelines.

The Insurer confirmed that a corrective action has been taken

Assets representing “house hold improvements” are not realizable in nature, the insurer is directed to henceforth place value of “zero” on leasehold improvements while calculating solvency margin and to comply with Para 2(1)(e) of Schedule I of IRDA (Assets, Liabilities and Solvency Margin of Insurers) Regulations, 2000 as amended from time to time to be read with Section 64 V (1) of Insurance Act 1938 at all times.

The Corporate Agents of the insurer are not having adequate number of CIEs/SPs to handle huge business volumes, the insurer is directed to ensure that the corporate agent has adequate number of specified persons at all times based on their geographical presence, business turnover etc. in order to ensure compliance to regulation 14(v) of IRDA (Registration of Corporate Agents) Regulations 2015It is noted from the insurer’s submission that the error has occurred while granting the renewal license to the said entity. It was brought to the notice of the insurer vide forwarding inspection report to the insurer on 14.09.2013. Till date the insurer is submitting that they have noted the error but they have not taken corrective action as the person co-coordinating the issue has resigned. Much time and many opportunities have been available to the insurer during the last more than two years, still the insurer did not have the inclination to rectify or set right the issue by, hiding behind the reason that the official concerned whose was dealing with and coordinating the matter had resigned from the company. Prima facie the insurer has accepted the lapse, however, they tried to escape from the same under the guise of inadvertent typo error.

Further orders to revise the clauses of agreements to comply with the all clauses of Guidelines on Outsourcing of activities by insurance company (Circular number IRDA/LIFE/CIR/GLD/013/02/2011)dated 1st Feb,2011).

The insurer submitted that all the cases pointed out by the inspection team were decided by the Tribunal. The insurer further stated that there had been no under reserving in any of the cases. The final compensation would be determined only after the Court judgement was received. In all the cases the factors determining the level of compensation being external on which the company had literally no control, it would be impossible to provide for the reserves ab initio.

The policy schedule mentions the benefit of “hospitalization” but the relevant terms & conditions of this benefit are included in the policy schedule. The premium of Rs. 200/- was charged from the client but the basis of charging premium is not shared by the insurer either to inspection team / in any of the replies given by the insurer. The premium rate charged to the customer is not as per “F & U” of “GPA” policy. The insurer has not mentioned all benefits payable under the policy in the policy schedule. The insurer has deviated from the filed version of the product while issuing the GPA policy to the insured M/s. Suraksha 4U Services. It is noted that the insurer is not providing the required information to the insured in the certificate of insurance as the members should be aware about the premium and benefits payable under the scheme.

Any organization / entity in its capacity as Group Organizer / Group Manager is prohibited from collecting any amount other than insurance premium payable to the insurers with regard to the underlying group insurance. The insurer has confirmed that BASIX is currently not collecting any administration charges from the customerPayments made towards infrastructure expenses by insurer to the dealers related to the corporate agent/broker are linked to the motor OD premium. The payout to vendors related to licensed entities is exactly equivalent to the commission paid to licensed entities in two cases and more than commission in two other cases. Though the agreements were entered with corporate agents, the payments were made only to the dealers who have rendered the services. Insurer has also not submitted the copy of the TDS certificates of FY 2009-10 issued to M/s Tata Motors (SAP) vide its reply dated 31/03/2016. Further, it is also noted that the payout towards infrastructure costs as a percentage on the motor OD premium to few vendors was decided/reviewed on the basis of the incurred claim ratio on the premium emanating from the strategic alliance partners. Insurer in its submissions has also accepted on entering into MoUs with corporate agents.

Further orders have been issued to Comprehensively examine all the existing outsourcing agreements, services outsourced under these agreements and terms of agreements to ensure that they are in compliance with the Outsourcing Guidelines dated 1st February, 2011 and Corporate Agents guidelines dated 14-07-2005. Enter into agreements hereafter with the service providers complying with the norms of the Outsourcing guidelines and also to carry out cost benefit analysis and effective due diligence as specified at Clause 9.3(ii) & 10.1 of Outsourcing guidelines. Re-examine the Honda agreement terms on non recovery of salvage value from the claim amount in order to maintain uniformity in claim payments amongst Honda vehicles solicited through various channels. Exercise enhanced supervision so as to ensure that there are no regulatory violations.

The company has deviated from the discount structure approved by the Authority under F&U guidelines by offering discounts beyond the approved structure, thereby not complying with F&U guidelines.The insurer submitted that a system has been put in place since 07-12-2010, which enabled us to capture the KYC requirements. The company did not come across any STRs and hence did not report to the FIU-IND. The company has adopted a system of on-going training programme at the Company’s training centre. Also, a reporting format has been designed specifically on AML and the report is submitted to the Department. Exception reporting will be presented by Internal Audit & Inspection Department to Audit Committee of the Board as part of AML policy. The list of banned persons/entities is sent to all the operating offices through their controlling ROs for their compliance.Most of the reinsurers meet with ratings requirement stipulated by IRDA. Few of their Securities/Reinsurers which are unrated are either Regional Pool or Government owned companies with whom the insurer has had long business relationship. These reinsurers are also in the placement slip of other PSU companies and GIC.

On examining the records, it is noted that the insurer accepted business from the three bancassurance corporate agents on pan india basis inspite of not having a single licensed specified person for general insurance business. It is to be noted that insurer too is equally responsible to ensure sale of insurance products by corporate agent only through persons qualified as “specified persons”.

insurer has allowed discounts/discretionary discounts over and above the approved structure, thereby not complying with F&U guidelines.

Y 500,000 There was a huge delay in appoi VR IyerN Nil No charges pressed further VR IyerN Nil No charges pressed further The insurer submitted that the VR IyerY Nil Order has been issued to document the segregation of function VR IyerN Nil No charges pressed further The New version of the Credence VR IyerN Nil Order has been issued to explor VR IyerN Nil No charges pressed further Insurer took note of the observ VR IyerY 500,000 No charge is pressed on observa VR IyerY 500,000 insurer has accepted group busi VR IyerY 500,000 No charges have been pressed s VR IyerY 500,000 VR IyerY Nil Issue of WarningY Nil Issue of WarningN Nil No charges pressed furtherY 500,000 By not filing the said product in the manner in wN Nil No charges pressed further The Insurer submitted that the said policy has N Nil No charges pressed further Insurer took note of the obser VR IyerY 500,000 Corporate agent of the insurer s VR IyerY Nil Order has been issued for the As per the guidelines, a corpora VR IyerY Nil No charges pressed further The License of M/s. Maruti Insu VR IyerY 500,000 No charges have been pressed sWith regard to the penalty charg VR IyerN Nil No charges pressed further Authority noted from the insure VR IyerY Nil Insurer has been ordered to coThough insurer submitted that t VR IyerY Nil Insurer has been ordered to enThe insurer has not the compli VR IyerN Nil No charges have been pressed fThe authority took note of the VR IyerY - Authority has taken a note of th VR IyerY - Insurer paid additional payouts VR IyerY 500,000 The insurer has been issued ordA per the available documents, VR IyerY - Insurer has been issued orders1) Insurer by continuing the re VR IyerY - The insurer has been issued ordGeneral insurer procured busines VR IyerY - Motor dealers and other individ VR IyerY 500,000 Motor dealer was claiming conso VR IyerY 500,000 The insurer has been penalied i VR Iyer

The functions of Front and Back Office were already segregated. Further the functions of Mid Office have been segregated w.e.f. 1 st. July 2013. Functional Matrix has been drawn up and implemented which clearly demarcates the authority of persons in Front Mid, and Back Office. Thus maker checker concept has been implemented

The automation has not been possible due to technology challenges due to varied data sources. The insurer is pursuing solution for this.

The insurer has violated the Authority guidelines and solicited business from motor dealers without being licensed and payments were made under the head of infrastructure and also entered into an additional relationship with licensed entity of another insurer. The insurer has deviated from the discount structure filed with Authority under F&U guidelines dated 28/09/2006 on rating of motor risks

Insurer accepted of making additional payment to group organizer cum agent towards various expenses. Insurer has violated the group guideline which clearly mandates an insurer not to make any paymentwhether as management expenses or documentation expenses or profit commission or bulk discount or payment of any other description, to the agent or corporate agent or group organizer or group manager.Insurer has deviated from the group guideline by reimbursing the claim payments to group organizer. As per the group guidelines, a group organizer can only facilitate in registering and claim settlement and it is the responsibility of the insurer to ensure that the claim payment is made in the name of insured member

Renewing a policy of the product for which no prior approval of the Authority is obtained is in deviation of Regulation 4(a) of IRDA (Health Insurance) regulations 2013 (HIR, 2013)At the request of the policy holder a card was issued in December, 2013 in addtition to the card once issued in 2009 and the client also confirmed the receipt of the card in December, 2013 in his e-mail dated 21st March, 2014

Designation Signa RemarksMember F&I

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Member F&IMember F&IMember F&IMember F&IMember F&I

Member F&IMember F&IMember F&IMember F&IMember F&I

Member F&IMember F&IMember F&I

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Member F&I

Member F&I

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Member F&I

Member F&IMember F&IMember F&IMember F&IMember F&IMember F&IMember F&IMember F&IMember F&IMember F&IMember F&IMember F&IMember F&IMember F&IMember F&IMember F&IMember F&IMember F&IMember F&IMember F&IMember F&IMember F&IMember F&IMember F&IMember F&IMember F&IMember F&IMember F&IMember F&IMember F&IMember F&IMember F&IMember F&IMember F&IMember F&IMember F&IMember F&I The penalty imposed is with respect to the sub charge (a) of charge no.3 and charge no.4Member F&IMember F&IMember F&IMember F&IMember F&IMember F&I Further decision is at charge 7 of the orderMember F&I Further decision is at charge 6 of the orderMember F&IMember F&IMember F&IMember F&I

Member F&IMember F&IMember F&IMember F&IMember F&IMember F&IMember F&IMember F&IMember F&IMember F&IMember F&IMember (ACTUARYMember (ACTUARY)Member (ACTUARY)Member (ACTUARY)Member (ACTUARY)Member F&IMember F&I On the corporate agent rendering other services to the insurer, decision is given at charge 3 of the orderMember F&IMember F&IMember F&IMember F&IMember F&IMember F&IMember F&IMember F&I Further decision is at charge no. 3 of the OrderMember F&I Further decision is at charge no. 3 of the OrderMember F&IMember F&I Further decision on these points is at charge 7 of the orderMember F&I Further decision on these points is at charge 7 of the orderMember F&I Further decision on these points is at charge 7 of the orderMember F&IMember F&I

The Insurer had issued “Mediclaim Policy 2012” to one of the Insureds for the period of Insurance 19.11.2013 to 18.11.2014. In the schedule of the said Mediclaim Policy 2012, the words ‘’-- terms as per Mediclaim-96’’ were mentioned. A complaint was lodged with the Authority alleging issuance of Mediclaim Policy 2012 with the terms of an unapproved product of Mediclaim 1996 and alleged non-compliance of the product with the Health Insurance Regulations 2013. The matter was also taken up with the insurer on the issues pertaining to ‘’Mediclaim Policy 2012

On the corporate agent rendering other services to the insurer, decision is given at charge 3 of the order


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