Max Life slapped with Rs 10 lakh penalty by Irda

The Insurance Regulatory and Development Authority (Irda) on Tuesday slapped a fine of Rs 10 lakh on Max Life Insurance for violating guidelines with regard to a payout to a corporate agent.

"The insurer (Max Life) is imposed a penalty of Rs 10 lakh (Rs 5 lakh each for the financial year 2008-09 and 2009-10) for payouts made to corporate agent Barclays Investments & Loans (India) Ltd apart/over and above permissible commission limits...," the insurance regulator said in an order.

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Irda has also directed Max Life to "strictly adhere to the Insurance Act, 1938, regulations made there under, guidelines and circulars issued...from time to time".

On a review of returns filed by Max Life, the Irda found that the payouts made by the insurer was in excess of the permissible commission to Barclays.

As per the details provided in the order, Max Life paid an excess amount of about Rs 4.57 crore in 2008-09 and about Rs 51 lakh in 2009-10 to Barclays.