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IRDA penalises Kotak Mahindra Life for violation of norms

Mahindra Old Mutual Life Insurance violated the guidelines on group insurance policies by not paying the small value death claims directly to the beneficiary

September 11, 2012 2:18 IST | India Infoline News Service
The Insurance Regulatory and Development Authority (IRDA) has penalised Kotak Mahindra Old Mutual Life Insurance for violation of various norms, including payment of death claims. The penalty amount is Rs. 22 lakh.

In an order on 7th September, IRDA Chairman J Hari Narayan said that it has directed Kotak Mahindra Life to remit the penalty of Rs. 22 lakh by debiting shareholder's account in 15 days.

Kotak Mahindra violated the guidelines on group insurance policies by not paying the small value death claims directly to the beneficiary. The insurer routed claims through the NGO, instead of paying it directly to the beneficiaries as required under the law, the order said.

The insurer has violated the guidelines by not paying the death claims on grounds of non-submission of additional documents, IRDA said.

"... It is held that the claim repudiations on the basis of non-submission of requirements called for is violation (of regulation) ... and a penalty of Rs. 1 lakh is imposed under the Insurance Act," IRDA said.

IRDA also advised Kotak Mahindra Life to revise its claim manual procedures in line with the regulations.

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