The Insurance Regulatory and Development Authority of India (IRDAI) has imposed a fine of Rs 5 crore on Policybazaar Insurance Brokers Pvt Ltd for a number of violations of insurance norms.
The regulator said that Policybazaar Web Aggregator Pvt Ltd (now Policybazaar Insurance Brokers Pvt Ltd) fined Rs 5 crore and issued directions, advisories, and warnings for various violations of the Insurance Act, 1938, and associated guidelines. Since its inception in 2008, Policybazaar has offered over 4.2 crore coverage guidelines.
IRDAI break insurance rules
If IRDAI is to believed, the business not only violated rules but also misled customers. According to the regulator, Policybazaar acquired directorships in other businesses without prior approval. It also found guilty of forcefully promoting positive types of coverage rules. Also, the company ranked some products higher by calling them advanced, without presenting any justification or providing guidance to customers, allegedly to push sales through deceptive claims.
Delays in payments to insurer
IRDAI investigation discovered that Policybazaar is behind schedule in moving customer payments to insurance companies after the sale. In 67 cases, the agency held the money for over 30 days, a long way past the mandated limit of 3 days. Also, the budget from 8,971 sampled policies transferred after delays ranges from 5 to 24 days. In general, the company retained budget from 77,033 policies past the prescribed three-day window.
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