Friday, March 14, 2014

SBI Life To Appeal Against Regulator's Refund Order Of Rs 275c

Private sector life insurer SBI Life Insurance has said it would appeal against the Insurance Regulatory and Development Authority's (IRDA's) order in which the regulator has asked the insurer to refund Rs.275.29 crore to the policyholders within six months as the amount was collected from them in violation of norms.

SBI Life Insurance Company is a joint venture between public sector leading lender State Bank of India and BNP Paribas Cardif, the insurance arm of BNP Paribas.

The regulator issued this order following an enquiry which unveiled that the insurer was charging the second year premium along with the first year premium on its Dhanraksha Plus Limited Premium Paying Term (LPPT), a
group insurance policy. It relates to policies issued between 2008-11.

The order had charged SBI Life Insurance Company of misrepresenting the nature of the policy, paying excess commission to agents and not providing buyers of an informed choice.

“Had the single premium version of product been offered to the policy holders, the actual commission payable would have been only 2 percent,“ the IRDA said in its order.

SBI Life Insurance had adopted business practices in violation of prescribed regulatory norms, it added.The regulator had approved both the products- the single-premium and two-year premium plans and appeared to suggest that the premium collected on the policies was far less than the Rs 625-crore amount that the regulator has mentioned in its order, Mr. Sen added.

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