Last Updated:
According to IRDAI, Policybazaar delayed transferring customer payments to insurers, violating norms. This lapse led the regulator to impose a fine of Rs 1 crore on the company
Since its inception in 2008, Policybazaar has sold over 4.2 crore insurance policies. (Representative/Shutterstock)
The Insurance Regulatory and Development Authority of India (IRDAI) has imposed a fine of Rs 5 crore on Policybazaar Insurance Brokers Pvt Ltd for multiple violations of insurance norms.
The regulator stated that Policybazaar Web Aggregator Pvt Ltd (now Policybazaar Insurance Brokers Pvt Ltd) has been fined Rs 5 crore and issued directions, advisories, and warnings for multiple violations of the Insurance Act, 1938, and related rules and regulations. Since its inception in 2008, Policybazaar has sold over 4.2 crore insurance policies.
Did The Company Break Any Rules?
If IRDAI is to be believed, the company not only violated regulations but also misled customers. According to the regulator, Policybazaar obtained directorships in other companies without prior approval. It was also found guilty of forcefully selling certain types of insurance policies. Additionally, the company ranked some products higher by calling them superior, without offering any justification or proper guidance to customers, allegedly to push sales through misleading claims.
Which Plans Were Shown On Top?
According to IRDAI, Policybazaar failed to transfer customer payments to insurance companies on time, resulting in a fine of Rs 1 crore. The regulator also flagged the company for promoting five specific ULIP (Unit Linked Insurance Plan) products as the best on its platform without proper justification. These products were: Bajaj Allianz Goal Assure, Edelweiss Tokio Wealth Gain Plus, HDFC Click2Wealth, SBI Life eWealth Insurance, and ICICI Signature.
Money Not Sent To Insurer On Time
IRDAI’s investigation revealed that Policybazaar delayed transferring customer payments to insurance companies after selling policies. In 67 cases, the company held the money for over 30 days, far beyond the mandated limit of three days. Additionally, funds from 8,971 sampled policies were transferred after delays ranging from five to 24 days. In total, the company retained funds from 77,033 policies beyond the prescribed three-day window.
view comments
Read More
