Insurance sector regulator IRDA has imposed fine of Rs 1.47crore on HDFC Life Insurance -- the highest ever penalty on any insurer -- forviolation of various regulatory provisions.
"... hereby direct the insurer (HDFC Life Insurance) toremit the penalty of Rs 1.47 crore," IRDA said in a strongly-worded order.
"A penalty of this nature is a regulatory necessity inorder to impress upon management of any insurance company that regulatoryprescriptions have to be complied with at all times and failure to do so willentail appropriate regulatory action," the order signed by IRDA Chairman JHari Narayan said.
The regulator has slapped fines of different amounts onvarious violations. The maximum penalty of Rs 1.05 crore was imposed in a caseof death claim under home loan protection policies. The claim was denied in acase where death occurred within 90 days from the date of commencement of thepolicy despite IRDA advising the insurer to delete this exclusion clause.
"This clearly shows the scant regard paid by theinsurer to the directions of the Authority on a matter which critically affectsthe policyholder welfare," it said.
Commenting on the IRDA order, HDFC Life said, the company inthe process of evaluating the order in detail and shall comment on it andprovide clarifications in the coming days.
"We however respect the concerns raised by theregulator and are committed to abiding by them. We would like to assure ourpolicy holders and all stakeholders that this order will not impact ourcommitted service levels," it said.
Last month, IRDA had imposed a fine of Rs 1.18 crore onICICI Prudential Life Insurance for violations that include paying agents andbrokers commissions exceeding the permissible limits. This penalty is now thesecond highest imposed by the regulator.