Flipkart Internet Pvt Ltd ( FIPL) is a registered corporate agent under composite category

Hyderabad: The Indian insurance regulator IRDAI has slapped a fine of Rs 1,06 crore on prominent e-commerce company Flipkart, promoted by Binny Bansal and Sachin Banls, for violating several regulations.

Flipkart Internet Pvt Ltd ( FIPL), is a registered corporate agent under composite category.

Insurance regulator has found fault with FIPL on many accounts including violating Corporate Agents Regulations, 2015 on three counts and  Insurance E-commerce Guidelines, 2017 and Registration of Corporate Agents Regulations, 2015.

The IRDAI has imposed a fine of Rs1crore on FIPL for violating  Clause 15.1(b) of Insurance E-commerce Guidelines, 2017.

According to the IRDAI, when a prospective customer visited Flipcart’s website and clicked on the “Insurance / Buy Insurance” button, the website redirected them to another insurance intermediary’s webpage, where the insurance purchase was completed.

Insurance Self-Network Platform(ISNP) approval by the IRDAI is granted strictly for direct integration with insurance companies and not with other insurance intermediaries. FIPL’s practice of routing customers to another insurance intermediary’s platform is in contravention of this regulatory requirement and facilitated an unauthorized insurance distribution channel, said an IRDAI order issued on Monday

FIPL misused its ISNP certified platform by integrating it with an insurance intermediary’s website instead of directly with insurers. The said arrangement is clearly prohibited in the Insurance Ecommerce Guidelines, 2017, said the IRDAI’s order signed by Satyajit Tripathy, Member, Distribution,  Rajay Kumar Sinha, Member, (F & I).

FIPL, in its response, claimed that It only provided digital advertising space to the insurance intermediary, without any referral or intermediary agreement. Such advertising activities are unrelated to its ISNP and corporate agency operations. When a user clicked on an advertisement or banner, FIPL had no control over what product/service they accessed on the insurance intermediary’s webpage.

In another case , the IRDAI had detected that Flipcart solicited  and procured  retail insurance business even after expiry of its Certificate of registration(CoR) and fined the company Rs 6 lakh for this lapse.

Further, the IRDAI said Flipcart procured over 70000 policies in a year with only one specified person whereas regulations mandate that a corporate agent can solicit and procure reasonable number of insurance policies commensurate with their resources and the number of specified persons they employ.”

Given that specified persons undergo specialised training in insurance, the high number of policies procured without adequate specified person raises serious concerns regarding FIPL’s compliance with regulatory requirements. The lack of adequate specified persons undermines the ability of the corporate agent to effectively solicit, service, and assist policyholders at the time of need, noted the IRDAI order..

Also, instead of providing direct servicing, Flipcart was found to be redirecting policyholders/customers to the insurer’s helpdesk for assistance, which is not in accordance with the regulatory requirement, said the order.

“FIPL is hereby warned for failing to provide satisfactory service to policyholders. Strict compliance with regulatory norms is mandated in the future to prevent further lapses,’’ cautioned the IRDAI order .