Hyderabad:
Even as Maruti lnsurance Broking and Hero lnsurance Broking lndia have brought stays from the Securities Appellate Tribunal (SAT) against IRDAI's decision to fine them for violating the Motor lnsurance Service Provider (MISP) norms, the insurance regulator continued its punitive actions against more players on the same ground.
The IRDAI has slapped penalties against Cholamandalam MS General Insurance and Toyota Tsusho lnsurance Broker (TTIBIL ) to the tune of Rs one crore and Rs 3 crore respectively for violating MISP norms.
IRDA thus far has taken actions against three large brokers, Maruti lnsurance Broking Hero lnsurance Broking lndia and Aditya Birla Insurance Brokers and has imposed a total fine over Rs 8 crore on them for violating MISP norms. .Earlier, the regulator had also fined Bajaj General Insurance and Digit Insurance on the samr ground.
In a bid to solicit motor business, IRDAI has concluded that Cholamandalam MS General Insurance has fraudulently paid Rs 22.98 crore to Ashoka Leyland Limited, Rs9.39 crore to Chola MS Risk Services Limited, group company of the general Insurer, Rs 40.96 crore to M/s DHFL Sales and Services Limited, associate of corporate agent of the general insurer and Rs 42.47 crore to Chola Insurance Distribution Services Private Limited, a related party and corporate agent of the general insurer providing insurance distribution services.
While rejecting the clarifications of Cholamandalam MS General Insurance that the above payments have been paid as advances to these four compoanies for advertising, publicity and manpower supply,IRDAI has said the recipients are not predominately engaged in the business of advertisement or branding.
“Hence, these payments raise concerns of whether these were genuine business transactions,’’ said IRDAI.
On TTIBIL, the IRDAI has said that it was informed by some general insurers stating that they are willing to enter into a service level agreement with broker based on transparent and objective criteria.
However, despite the insurance companies having made requests to TTIBIL for empanelling them, TTIBIL has neither responded nor empanelled them for selling motor insurance policies through their MISP's and violated MISP norms.
TTIBIL is a significant broker in the selling and distribution of motor insurance in the country.It is part of the Toyota Kirloskar Motor Pvt Ltd having strong presence in motor vehicle segment. Therefore, as one of the top brokers in the motor insurance broking segment, TTIBIL is seen as an ideal for other insurance brokers. ln light of such expectations, TTIBIL was expected to act diligently and with utmosl care and responsibility giving no room for error.
“Unfortunately, TTIBIL failed in complying with the MISP Guidelines which had been created to protect the interest of the policyholders and other stakeholders.’’ said the IRDAI..