The Insurance Regulatory and Development Authority of India (IRDAI) has fined Birla Sun Life Insurance for violating several regulations, including one which forbids insurers from giving rewards such as foreign travel and gift cards to corporate agents and brokers.
A total fine of INR2 million (US$29,600) was levied from the insurer by the industry regulator for four offenses, each worth INR500,000 (US$7,400).
The first offense was a violation of the regulator’s corporate agents guidelines. The company admitted to providing gift cards and foreign trips worth INR38 million (US$563,000) to employees of its corporate agents and brokers in the 2011-2012 period.
“Any payout to an employee of the corporate agent in relevance to solicitation is deemed to be a payment to the corporate agent himself or as an unlicensed individual encouraged to be involved in soliciting of insurance business,” IRDAI said in an order.
The three other violations were disregarding of File & Use guidelines, disobeying regulations regarding premium collection of unit-linked insurance plans (ULIPs), and engagement of a business mentor.
The amount will be debited from Birla Sun Life’s shareholders’ account and will be remitted to the IRDAI within 15 days.
Birla Sun Life Insurance is a joint venture between the Aditya Birla Group and Sun Life Financial of Canada.
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