The Insurance Regulatory Authority of India (IRDAI) has penalised HDFC Life with a fine of Rs 2 crore for flouting various regulations as per media reports.
As per the company's filing in an exchange, the penalty was reportedly imposed after an onsite inspection by IRDAI pertaining to the financial years 2017-18, 2018-20, and 2019-2020.
At 02:33 pm, the shares of HDFC Life were trading at Rs 708 price level, down by 0.73 per cent on the National Stock Exchange.
The penalty of Rs 2 crore was for issues related to the protection of policyholders’ interests and irregularities with outsourcing the services of the company.
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The company has to pay the penalty within 45 days from the day of the order of the receipt.
Apart from imposing financial penalties, the regulatory authority reportedly has also given the company directions and advisories to adhere to within a stipulated time frame to rectify the inadequacies and ensure compliance with the regulatory standards.
The insurance regulator directed the company to review its vendor management agreements before finalising the outsourcing deals. It should also send a detailed action plan on outsourcing contracts and other violations, reported Business Standard.
IRDAI further stated that the insurer must place the order before the board of the company and provide the minutes of the meeting to the regulator.
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An action taken report must also be submitted by the company to the regulator detailing the action taken on the direction by IRDAI within 90 days of the order’s receipt. If the insurer is aggrieved by the order, they can approach the Securities Appellate Tribunal.
IRDAI is a statutory body established by the Insurance Regulatory and Development Authority Act,1999 to regulate and supervise India’s insurance sector. IRDAI’s goal is to protect policyholder’s interests and promote the industry’s orderly growth
