IRDA fines ICICI Lombard Rs 10L for violating norms

Irdai has imposed a penalty of Rs 10 lakh on ICICI Lombard General Insurance Company for violating various insurance norms including modification of policy wordings. "The penalty amount of Rs 10 lakh shall be paid through Demand Draft drawn in favour of Insurance Regulatory and Development Authority of India (Irdai) payable within 15 days from the receipt of this order," it said in a communication to the insurer. In a case related with enrollment of khadi workers under Rajiv Gandhi Shilpi Swasthya Bima Yojana (RGSSBY) in Rajasthan during policy year 2009-10, Irda said the insurer enrolled some beneficiaries soon after receipt of enrollment forms and didn't wait for full receipt of their share of premium.

"ILGICL did not ensure that each of the beneficiaries had paid its share of premium without adhering to said condition in the MoU. The balance premium was never received at all," it said. It said insurer's failure to collect beneficiaries share of premium before granting coverage was a clear violation of Insurance Act 1938.

"...and accordingly for the said violation, a penalty of Rs 5 lakh is imposed on the insurer," it said. In a matter of similar penalty of Rs 5 lakh, Irdai said the company made modifications in its Group Janata Personal Accident Insurance Policy which was not approved by the Irdai. The insurer offered the Group Janata Personal Accident Insurance Policy in the years 2006-07, 2007-08 and 2008-09.

"Various modifications to the policy wordings by the insurer made the product different from the originally filed one," it said. It said there were certain exclusions from the policy words which was indeed a violation and was detrimental to the interests of the policyholders. "Thus, the Authority is of the view that the insurer has not complied... which requires the insurer to file fresh insurance products or any changes to the already approved products. The Authority imposes a penalty of Rs 5 lakh on the insurer," it added.