The insurance regulator, IRDAI, has fined SBI Life Insurance Rs 1 crore for violating rules related to outsourcing and insurance web aggregators.
Additionally, IRDAI has instructed the company to exercise caution when handling death claims, emphasizing that no negligence should occur in such cases.
The company breached several rules and guidelines
IRDA stated that SBI Life Insurance worked with web aggregators like Policybazaar, MIC Insurance, Compare Policy, Easypolicy, and Wishfin without formal agreements covering services and fees.
Additionally, the company failed to provide accurate information about outsourcing payments and rejected claims that were over three years old.
IRDA has instructed SBI Life Insurance to develop an outsourcing policy that complies with all relevant rules and guidelines.
SBI Life Insurance is not clearly outlining the rules in its agreements
The company stated it had delegated post-sale tasks, such as premium reminders and policy service assistance, to web aggregators.
However, IRDA noted that the agreement lacked clear information on this arrangement.
The regulator also discovered that the company paid Rs 1.93 crore to Extent Marketing and Technologies for the financial years 2017-18 and 2018-19, a payment SBI Life Insurance had not disclosed.
Additionally, the company’s vendors were operating through outsourcing, with 95 percent of their revenue being transferred to third parties.
The rules were not followed when rejecting the insurance claim
Additionally, IRDA has instructed the company to adhere strictly to the Insurance Act.
IRDA found that SBI Life Insurance had rejected 21 insurance claims, citing deaths within three years of policy issuance.
However, the company failed to provide adequate evidence to IRDA to support these rejections.
