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SBI Life fined Rs 4 lakh by Irdai for violating norms on protection of policyholders
  SBI Life Insurance Company Ltd. | 17 Jan 2020 | 10:51 AM
Published on 10-29-2019
Insurance sector regulator Irdai has imposed a fine of Rs 4 lakh on SBI Life Insurance Company Ltd for violating norms on advertisement and protection of policyholders` interest.


The Insurance Regulatory and Development Authority of India (Irdai) said it had examined samples of proposal forms signed on November 30 2016; December 23 2016; February 17 2017; and March 23 2017.


It was found that provisions prior to the Insurance Laws (Amendment) Act 2015 were incorporated instead of new provisions.


Besides the provisions of the Section 45 of Insurance Act 1938 which deals with advertisement and disclosure norms were not properly reflected the regulator said.


Irdai said the dates on which the samples were examined almost two years after the promulgation of Insurance Laws (Amendment) Act 2015 which indicated a casual approach of the life insurer in adhering to the regulatory norms.


"A proposal form is a basis of the contract and the provisions of the referred sections of Insurance Act 1938 should be clearly and correctly mentioned. The lapses on the part of the life insurer not only violate the provisions of regulations but also indicate lack of proper internal controls in usage of applications for insurance which may jeopardize the interests of the prospects/insureds" Irdai said in its order.


Hence the authority as per the powers vested in it under Section 102(b) of the Insurance Act 1938 a penalty of Rs 4 lakh (Rs 1 lakh for lapse noticed in each of the four proposal forms) is imposed on the life insurer" it said.


It also directed the life insurer to ensure non-recurrence of such lapses.