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34 insurers flout IRDA rules over last 10 years: Reports

However, the insurance regulator has acted only against nine of them

June 12, 2012 4:32 IST | India Infoline News Service
According to media reports, 34 insurers’ have not followed insurance rules between 2000 and 2010. However, the insurance regulator has acted only against nine of them.
The insurance rules clearly lay down the social and rural obligations for insurers but insurance companies don’t follow them. However, till 2005-06, there was no fine imposed on the insurers who defaulted, the reports added.
According to IRDA (Insurance Regulatory and Development Authority), which was set up in 2000, the insurers were given gestation period of five years to settle down in the business. But even after five years of gestation period, only part of the penalty was imposed, the reports highlighted.
Among the defaulters include Aviva Life Insurance, LIC, Reliance Life, New India Assurance, Iffco Tokio General, Bharti AXA General, Apollo Munich Health, Tata AIG General, Reliance General, MetLife, Tata AIG Life, Kotak Mahindra OM Life, Bharti AXA Life, Shriram Life, Cholamandalam General, National Insurance and New India Assurance.
The fine was imposed on only nine companies some of which include New India Assurance, Shriram Life, National, Iffco Tokio General, Apollo Munich Health and LIC.
According to the IRDA rules, in the rural sector, insurers have to get a certain percentage of business every year, both in life and general insurance. In the social sector, insurers have to insure 5,000 lives in the first financial year, 7,000 lives in second year and 10,000 lives in third year. However, most insurers focus on cities to make profit and don’t follow the IRDA rules.
 

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