Insurance regulator IRDAI has imposed a penalty of INR 51 lakh on four insurers, including SBI General Insurance Company, to violate certain norms related to motor insurance. INR 25 lakh has been imposed on SBI General Insurance Company for not fulfilling regulatory obligations under the Motor Third Party (MTP) business.
The Insurance Regulatory and Development Authority of India (IRDAI) has also imposed a penalty of INR 13 lakh on Liberty General Insurance Limited, INR 10 lakh penalty on Bajaj Allianz General Insurance Company, and INR 3 lakh on Royal Sundaram General Insurance Company. In the order on SBI General Insurance Company, IRDAI said the charge was that the insurer did not comply with the MTP Obligation for the financial year 2017-18 calculated as per Regulation 3 of the IRDAI (Obligation of Insurer in respect of Motor Third Party Insurance Business) Regulations, 2015.
The order said that for the financial year 2017-18, the insurer did not fulfil the obligation and had a shortfall of INR 104.6 crores (24.08%), which amounts to non-compliance with Regulation 3 of IRDAI (Obligation of Insurer in respect of Motor Third Party Insurance Business) Regulations, 2015. It further said the insurer had not fulfilled the MTP obligations during the immediate previous financial year 2016-17 with a significant shortfall of INR 146 crores (38.59%).
The order also said that considering the repetitive nature of the violation, the magnitude of the violation, and the submissions of the insurer that they are committed and are entering into various tie-ups to fulfil the MTP obligation, the Authority at this moment imposes a penalty of INR 25 lakh. As per the order on Liberty General Insurance Limited, the penalty of INR 13 lakh has been imposed on violating certain provisions of Guidelines on Motor Insurance Service Provider (MISP Guidelines). The insurer was also directed to ensure in future that any engagement with automotive dealers is strictly in compliance with MISP Guidelines.
A penalty of INR 10 lakh has been imposed on Bajaj Allianz General Insurance Company to violate certain provisions of the Insurance Act, 1938. In Royal Sundaram General Insurance, the IRDAI order said the insurer violated a provision of MISP Guidelines while imposing the penalty of INR 3 lakh penalty.
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