The insurance regulator, IRDAI has slapped a penalty of Rs. 15 lakhs against Shriram Transport Finance Company, a corporate agent(CA) of Shriram Life, for violating the corporate agency norms.
It was observed that 983 policies were solicited by one specified person (SP) , between 14th April, 2015 and 28th March, 2017 although the said SP was relieved from employment on 13th April, 2015.
Also the CA was having the practice of solicitation by persons other than Specified Persons (SPs) and allot the policy in the name of SPs.
It was also observed that on a given day the SPs were soliciting business across branches at different geographic locations.
In many cases, the proposal forms don’t contain the details of intermediary/SP and signature of SP.
In cases of products Viz. New Sri Life, Life Secure Plus, which are predominantly having non-guaranteed benefits; the benefit illustrations were not signed by the SPs or persons qualified to solicit business.
“Even the submission of the insurer clearly indicates that in majority of cases, involvement of SP is negligible during solicitation of business and hence the CA is engaging unlicensed persons for soliciting business,’’ said IRDAI in its penalty order.
There are instances where the insurance plan and premium as mentioned in the proposal forms were differing from that mentioned in the benefit illustration (BI).
These BIs were also not signed by the SP thereby violating regulations.
“This further strengthens the conclusion that the CA was engaging untrained and unauthorised persons to bring in business,’’ said IRDAI.