IRDAI slaps Rs 3 Cr fine on Aditya Birla Insurance Brokers

Hyderabad: Insurance regulator IRDAI has penalised Aditya Birla Insurance Brokers Limited, one of the top brokers in the motor insurance broking segment, Rs 3 crore for violating the Motor Insurance Service Provider guidelines, which are designed to protect the interests of policyholders.

The Insurance Regulatory and Development Authority of India (IRDAI) took ABIBL to the task following complaints that it had forced automobile customers to buy policies of insurers who are on its panel. The complainants accused ABIBL of fixing uniform premium rates for all the insurers on the panel for the same vehicle model. It was also alleged that the company had created the panel of insurers in violation of Motor Insurance Service Provider (MISP) norms.

On examining the submissions made by the insurance broker, the regulator observed that ABIBL had not complied with the applicable provisions of IRDAI. In its defence, ABIBL said there was no evidence to back the allegations that it had created a panel. The company said it had not received a single request from any of the insurers desiring to have an arrangement. ABIBL said it had not received any complaint from customers of not having to get their choice of insurers.

After examining the charges levelled against ABIBL, the regulator said, "ABIBL being a representative of the customers has failed to perform its responsibilities of getting the best for customers. All the submissions made by ABIBL established that ABIBL had violated the IRDAI regulations. ABIBL has acted against the interest of policyholders and stopped them from getting lower premium rates."

The regulator ruled in its judgment, "Based on the charged Aditya Birla Insurance Brokers is hereby directed to pay a penalty of Rs 3 crore."

Source: News Meter