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IRDA said that there has been negligence on the part of MetLife Insurance Company and has imposed a fine of Rs 2 lakhs to be paid within 15 days.
The insurance regulator received a complaint from Suresh Chukkapalli regarding non-receipt of life insurance policy from MetLife even after a lapse of 11 months.
In its defense, MetLife Insurance Company officials told IRDA, “The time taken to refund the proposal deposit was due to review of the underwriting decision on the request of the complainant and also to explore all the available avenues to offer any alternate insurance products.”
To further justify their stance, MetLife also said, “For the period April 2011 to August 2011, in respect of 98% of declined cases, the proposal deposits were refunded within 3 days.
Under the IRDA (Protection of Policyholders’ Interests) Regulations 2002, an insurer is required to process a proposal with speed and efficiency and communicate the decision has to be communicated in writing to the applicant within a period not exceeding 15 days from the date of receipt of proposal.
“The insurer (MetLife) did not pay sufficient attention in promptly communicating the underwriting decision as well as in refunding the proposal deposits collected from the complainant within the prescribed timelines,” added IRDA.
Due to negligence on part of the insurer, the IRDA imposed a penalty of Rs 2 lakhs to be paid within 15 days from the date of receipt of the Order.