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IRDAI fines 50 lacs on Future Generali Life Insurance

IRDAI fines 50 lacs on Future Generali Life Insurance
Insurance Regulatory and Development Authority of India (IRDAI) imposed penalty of Rs. 50 lacs on Future Generali Life Insurance Company. Below is the summary of charges levied on the insurer, each charge costs Rs. 5 lacs to the insurer.
  • During 2010-11, “Big Bazar Gift Vouchers” worth Rs. 23.5 crores (Accounting “Head “Sales & Marketing Promotions”) were purchased from “Future E-Commerce Infrastructure Limited”, a group Company and the same were distributed in the name of “Brand Building Activity and Recruitment Drive of Potential Advisors”. The expenditure incurred vis-à-vis total number of individual agents recruited (10487 agents recruited compared with expenditure incurred of Rs. 23.5 crores) is unreasonably high, the policies were sourced through unlicensed entities/individuals.
  • Non-receipt of approval of renewal of the corporate agency within 7 days shall not be considered as approval by the authority.
  • On scrutiny of the pertinent documents, it is observed that an entity by name V care is soliciting insurance business for another life insurer. The said entity is not holding any license issued by the authority. 
  • The agreements were continue even after withdrawal of referral/lead generation circulars and the issuance of IRDA (Sharing of Database for distribution of Insurance Products) Regulations, 2010. 
  • M/s Reach Life Care - corporate, has been made extra payout in the name of marketing expenses.
  • In the convention held by Future Generali in August 2011, one individual agent of another life insurer also attended this convention, this individual who was neither tied up as agent nor appointed as a specified person by any of the corporate agents of the life insurer was benefitted from the foreign tour.
  • Huge numbers of claims are not settled in respect to group schemes. Insurer has no proper administration for group policies, there is no systems of issuance of certificate of insurance to the members of the group which would have easily facilitate claim settlement. Penalty imposed, due to casual approach towards group claim settlement and also for huge number of claims unsettled.
  • An agreement for “Market Support Activities” was entered with Seashore Consultancy, the insurer has again made a payout to the above corporate agent, in the name of marketing expenses, marketing fees etc.

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