Reliance Life Insurance Company has been slapped with a fine of Rs. 10 lakhs by the insurance regulator in India, IRDA.
Reliance life insurance was hauled up for a variety of reasons but was fined only on 2 counts which include paying excessive referral fees and selling policies which have not been approved by IRDA. Reliance Life was fined Rs. 5 lakhs for each of these issues. The amount of referral fees that can be paid to insurance distributors are clearly define by IRDA and life insurance companies need to strictly follow these guidelines. Also every life insurance policy has to get the prior approval of IRDA before it can be sold by any life insurance company.
There were some other issues also for which IRDA has issued a warning to Reliance Life but has stayed away from a fine as they were first time occurrences. These include opening of branches without the approval of IRDA, outsourcing of key jobs which are not permitted and for not issuing licenses in a timely manner.
The President of Reliance Life, Mr Malay Ghosh had appeared in person for sharing its stand to IRDA.