New Delhi, Aug 4 Insurance sector regulator IRDAI has slapped a Rs 5 crore penalty on online insurance platform Policybazaar over violating several charges under various provisions of the Insurance Act and IRDAI (Insurance Web Aggregators) Regulations, 2017.
The penalty amount should be remitted by the insurance web aggregator (IWA) within a period of 45 days from the date of receipt of this order, according to an IRDAI order.
The order stated that key managerial personnel (KMPs) and employees of the web aggregator are allegedly having directorships in other companies without prior IRDAI approval.
“In addition, it is also observed that the President, Head of Operations, Director General Insurance Business, and BU Head were holding the position of the directorship in other entities,” the order read.
Apart from regulatory breaches, Policybazaar has been found guilty of allegedly promoting products in a biased manner, and ranking various insurance products are top or best without "making available any material to the prospects to make an informed choice".
"IWA apologised for not taking the prior approval of the Authority. Post Personal Hearing, the IWA submitted that current Principal Officer and Key Managerial Personnel (KMPs) are not holding directorship in any other company," it further added.
The IWA regulations require that the domain names of primary or secondary, or product category-specific websites are owned and registered in the name of the IWA.
"However, it is noticed that the website of policybazaar.com is owned by its holding company. IWA has paid a license fee @ 5 per cent of the revenue to the holding company for the usage of the domain name. During FYs 2018-19 and 2019-20, a sum of Rs 15.51 crore and Rs 25.79 crore, respectively, has been paid to the holding company", the IRDAI said.
Further, on examination of the documents submitted by the IWA, it is concluded that the submissions of the IWA with regard to owning of domain name/website policybazaar.com are not found true, it added.
According to the order, the IWA website clearly stated at the time of inspection, the top 5 ULIP plans (Bajaj Allianz Goal Assure, Edelweiss Tokyo Wealth Gain+, HDFC Click2 Wealth, SBI Life e-wealth Insurance, and ICICI Signature).
"IWA website displayed only details of ULIP products of five insurance companies, while the IWA had agreements with other life insurance companies that offer ULIPs. Using the expression 'Top products' itself denotes the ranking of products based on some criteria. Only 5 products of insurers were displayed as ‘Top products’ when the entity has an agreement with many life insurance companies that offer ULIPs," according to the order.
Similarly, under the "Health section", there was mention of “Top plans-health insurance” from 12 insurers in a particular sequence (rating).
According to the order, by showing some particular insurance products of some insurers as “Best” or “Top plans”, it has led to the creation of preference and promotion of these insurers and their specific plans only.
Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor