After penalising Maruti lnsurance Broking with a fine of Rs 3 crore on Monday, for violating various provisions of Motor lnsurance Service Provider (MISP) the insurance regulator IRDAI has slapped a penalty of Rs 2.18 crore against Hero lnsurance Broking lndia on Tuesday on similar grounds..


Like, Maruti lnsurance Broking, the IRDAI has asked the Hero lnsurance Broking lndia not to pay any performance incentives to its principal officer as he has misled the insurance regulator on facts.


Unfortunately, HIBIL failed in complying with the MISP Guidelines which had been created to protect the interest of the policyholders and other stakeholders. ln order to ensure compliance with the MISP Guidelines and to improve governance in HlBlL,said IRDAI.


lt was observed that even though HIBIL has empanelled nine general insures and one standalone health insurers, no justification was given by HIBIL to restricl the number of insurers to 10 and not allow other general insurers to sell motor insurance policies through HIBL's sponsored MISPs thereby leading to violation of MISP guidelines.


Though, HIBIL had informed the IRDAI that it had empanelled 10 general insurers, five out of the 10 general insurers, on being queried by the insurance regulator had denied that they were empanelled by HlBlL, which proves that the company furnished wrong information to the IRDAI.


However, despite the insurance companies having made requests to HIBIL for empanelling them, HIBIL have neither responded nor empanelled them for selling motor insurance policies through their MISP's.


Hero lnsurance Brokers is one of the biggest insurance broker covering 2-wheelers in the country. lt carries in its name, the name of being one of the largest 2-wheeler manufacturer in the country.Therefore, as one of the top brokers in the two – wheeler insurance broking segment, HIBIL is a leader in its field. This places tremendous responsibility on HIBIL as it is held as the torch bearer of the broking profession. ln light of such expectations, HIBILwas expected to act diligently and with utmost care and responsibility, said IRDAI. 


The IRDAI has directed the HIBIL to undertake the following changes:

a) 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's systems without any intervention by the broker and report compliance within three months from the date of the order. ln case any insurer does not wish to enter into an agreement with the insurance broker for selling and distributing motor insurance policies through the MISPs sponsored by HlBlL, the CEO of the general insurance company will confirm the same in writing to the broker.

b) redesign the current system of seeking customer consent for purchasing the motor insurance policy in such a manner that the customer exercises choice of selecting the insurer through an OTP based system at the time of issuance of a new motor insurance.