Insurance Regulatory and Development Authority (IRDA) has imposed a penalty of Rs. 5 lakh on Bajaj Allianz Life Insurance for violating regulations pertaining to group unit-linked policies (ULIPs).
IRDA received a complaint against Bajaj Allianz Life Insurance that it was enrolling new members into the existing group scheme issued to Yes Bank under membership number 0193090575. (Bajaj Allianz Life Group Unit Gain–116L079V01–a ULIP Group Insurance Plan). A show cause notice was issued to Bajaj Allianz Life for enrolling new members into existing group schemes where master policy was issued prior to 1 September 2010 without revising the existing scheme as required under a fresh circular on ULIPs issued on 27th October 2010.
However, the company in its submission to the regulator said "that by its actions (by keeping in mind the spirit of the circular), has complied with the directions as given in the aforesaid circular on a prospective basis and have not offered any product for sale in contravention of the circular from 1 September 2010".
“By taking it into account of the seriousness of the violation a penalty of Rs5 lakh is imposed on the insurer under section 102(b) of the Insurance Act, 1938,” IRDA said in an order.
The penalty should be paid within 15 days from the date of receipt of the order, it said.