Insurance regulator, IRDAI on Monday has slapped a fine of Rs 3 crore against Maruti lnsurance Broking, the largest broker in the country, for violating various provisions of the Motor lnsurance Service Provider (MISP) norms.
Further, taking serious note that the affidavit submitted by the principal officer-Surender Shrivastav,- of MIBL is contrary to the facts,the IRDAI had directed the company not to pay performance incentives to him for one year from the date of its order.
“Unfortunately, MIBL failed in complying with the MISP Guidelines which had been created to protect the interest of the policyholders and other stakeholders. This is evident from the penalties imposed for the violations of various provisions of the MISP Guidelines,’’said IRDAI.
Even as the public sector general insurance companies have complained about the violations of MISP norms by a few private sector players, IRDAI has already taken actions against Bajaj General Insurance and Digit for not complying with the MISP norms.
ln order to ensure compliance with the MISP Guidelines and to improve governance, the IRDAI has directed the MIBL to undertake the following changes:
-dismantle panel of insurers and empanel all insurers on platform, have full integration with insurers computer systems, ensure premiums quoted to customers come directly from insurer systems without any intervention by the broker and report compliance within 2 months from the date of order.
-in case any insurer does not wish to be part of the panel,the CEO of the general insurance company, they will confirm the same in writing to the broker.
-redesign the current system of seeking customer consent for purchasing the motor insurance policy in such a manner that the customer exercise choice of selecting the insurer through an OTP based system at the time of issuance of a new motor insurance policy or its renewal.
The IRDAI has asked MIBL to complete the task in six months from the date of order and report compliance.
Th IRDAI has received complaints from policyholders against some of the MISP sponsored by insurers and insurance intermediaries for the following:
a) forcing motor customers to buy motor insurance policies of the insurers who are on their panel.
b) having uniform premium rates of different insurers for same motor vehicle,discriminating between insurance policyholder who has bought motor insurance from that motor dealer as against those who has not bought from them.
Some General lnsurance Agents Association also complained to the Authority of the apparent conflict of interest in the role of MISP in selling insurance policies and servicing & repairing motor vehicles on the insurance policies sold by it. They also highlighted the high claims ratio under the MISP channel, extra payments made to MISP by insurers, disparity of treatment to agents, etc.
The IRDAI also received complaints from insurers that insurance intermediaries have created a panel of insurers which is in violation of Guidelines on Motor lnsurance Service providers.