Page 10 - The Insurance Times May 2021

circulars issued there under, IRDAI Aatur Thakkar, Co-Founder & Director, obligation and had a shortfall of Rs.
said in a circular. Alliance Insurance Brokers, stated, 104.6 crores (24.08%), which amounts

Future Generali violated rules under "The first set of approvals involved to non-compliance of Regulation 3 of
'File & Use' guidelines by selling up- evaluating as high as 173 proposals IRDAI (Obligation of Insurer in respect
approved add-on covers without received in 3 months. The high- of Motor Third Party Insurance
approval of the authority. It also powered committee appointed for this Business) Regulations, 2015."
violated Protection of Policyholders' purpose evaluated these proposals and It further said that the insurer had not
Interests Regulations by restricting the gave the nod for 33 of them. fulfilled the MTP obligations during the
available options to the prospect at the The approvals were time-bound for 6 immediate previous financial year
point of sale, IRDAI added. months from 1 February 2020. The 2016-17 with a significant shortfall of
second and third tranches contained Rs. 146 crore (38.59%).
IRDAI notifies extending 16 and 18 approvals, for similar 6 "Taking into consideration the
months periods from 1 May 2020 and
validity of sandbox repetitive nature of violation,
1 July 2020, respectively. This was magnitude of violation, and the
regulations by 2 years followed with a second cohort of filings submissions of the insurer that they
IRDAI has recently notified the for which IRDAI had provided a are committed and are entering into
extension of its sandbox regulations by window between 15 September 2020 various tie-ups to fulfill the MTP
another 2 years to enable the and 14 October 2020. The filings were obligation, the Authority... hereby
completion of the experiment of larger in number than the first cohort, imposes a penalty of Rs. 25 lakh," the
existing sandbox proposals and also to totaling 185." order added.
allow new sandbox proposals for the
experiment. IRDAI imposes Rs. 25 lakh Bajaj Allianz General
The original sandbox regulations penalty on SBI General Insurance fined Rs. 10 lakh
released in 2019 indicated that IRDAI Insurance by IRDAI
could run them for 2 years. The idea
was to run the sandbox for 2 years and IRDAI has recently imposed a Bajaj Allianz General Insurance
then take a view on how things work. monetary penalty of Rs. 51 lakh on 4 Company Ltd. was fined Rs. 10 lakh by
However, with the delays caused by insurers, including SBI General IRDAI for violation of the Insurance
COVID-19, among other things, the Insurance, for violation of norms Act and its Motor Insurance Service
first year of applications themselves related to motor insurance. A fine of Provider (MISP) guidelines.
took too long to roll out and be Rs. 25 lakh has been imposed on SBI IRDAI, in its order, said that Bajaj
completed. Hence, the current General Insurance Company for not Allianz General had solicited 2,214
notification has extended the fulfilling regulatory obligations under motor insurance policies between
regulations by another 2 years. the Motor Third Party (MTP) business. November, 2017 and January, 2018
Naval Goel, Founder and CEO, In the order on SBI General Insurance involving a premium of about Rs. 1.44
PolicyX.com, remarked, "There is Company, IRDAI said the charge was crore. The regulator said the company
merit in this extension of regulatory that the insurer did not comply with had sold the policies through 90
sandbox, which is established for live the MTP Obligation for the financial unregistered entities. Exercising its
testing of new products or services. year 2017-18 calculated as per powers under Section 105C of the
This amendment will help drive Regulation 3 of the IRDAI (Obligation Insurance Act the IRDAI levied a
innovation in the insurance sector as of Insurer in respect of Motor Third penalty of Rs. 10 lakh on Bajaj Allianz
insurance companies will now be able Party Insurance Business) Regulations, General.
to experiment considerably without 2015. According to IRDAI, the penalty should
taking approvals to launch a new The order said, "For the financial year be paid online after debiting the
product." 2017-18, the insurer did not fulfill the company shareholder's account. T

10 The Insurance Times, May 2021