Emails leaked on social media suggest that top executives who sell insurance products to customers were sent on all-expenses paid foreign trips and were gifted gold coins.
Leading private sector general insurance company ICICI Lombard has been accused of offering kickbacks such as all-expenses-paid foreign trips and gifted gold coins to top executives of housing finance and auto companies, by independent journalist Dharmesh Thakkar.
Thakkar has put out emails purportedly between executives of ICICI Lombard and the executives were rewards for business associates is being discussed.The practice is banned by the Insurance Regulatory and Development Authority of India (IRDAI) and under ICICI Lombard's own Code of Conduct.
— dharmesh thakkar (@news_houndz) January 14, 2019
While dealers and banks are provided commission for each policy sold along with a housing or car loan, the emails leaked by Thakkar suggest that off-the-books rewards were handed to bank officials and dealers.
As per the screenshots, an email from November 2014, to two ICICI Lombard senior managers listed details of a trip to Italy organised for the top management of PNB Housing Finance Ltd, which cost the insurance company more than Rs 48 lakh. One of the employees responded to the email with an "ok".
According to the report, another email exchange revealed that an ICICI Lombard employee sought approval from senior managers to offer "20-gram gold coins" for "directors they have tied up with," listing seven heads of cooperative banks. The same was reportedly approved by a senior manager.
In a third email, according to Mumbai Mirror, approval was sought for a group tour of senior leaders and employees of a large Mumbai-based NBFC in May 2014 to Prague. The cost of the trip was pegged at over Rs 19 lakh as per the report.
code of conduct @ICICILombard prohibits gifting gold coins, foreign tours, expensive gifts to business associates and govt officials but top management approved gold coins, international holidays and extravagant gifts @airindiain @PNBHousing @LabourMinistry officials @CVCIndia pic.twitter.com/MKZA7Jk1nF— dharmesh thakkar (@news_houndz) January 11, 2019
ICICI Lombard told Moneycontrol in a statement: "At the outset, the company notes that the social media account that is circulating various internal and confidential emails of employees of the company are based on stolen data and makes selective releases for promoting malafide conclusions."
It continued, "The expenditures primarily alleged in the article are business expenditures spent on trainings, conferences and seminars conducted from time to time for persons responsible for distribution of insurance products.
"Insurers organise necessary trainings and conferences regularly to train and give exposure to the intermediaries and others about the products they distribute and the allied processes."
Further, the general insurance company said, "...the company has necessary codes, guidelines and processes that need to be adhered to by its employees in their day to day operation. These include matters like gifting and activities conducted such as trainings, conferences and familiarisation programs for distribution partners."
"The company will examine allegations and review complete records pertaining to the period from 2012 to 2014 or earlier as required and to ascertain that the expenditures incurred were in line with applicable company policies."
The company noted that action would be taken against if lapses are found in the conduct of any employee.
An ICICI Lombard spokesperson rubbished talk in social media that the insurance firm had threatened to sue Thakkar.
Section 31B of the Insurance Act restricts insurers from paying any amount by way of remuneration or commission in respect of insurance business exceeding a certain specified (mostly monetary) cap. Section 40C instructs insurers to declare details of all expenses before the regulator.Note: This article has been updated to incorporate the response of ICICI Lombard general insurance.