The Insurance Regulatory and Development Authority (IRDA) on 28 June 2012 fined 1.47 crore rupees on HDFC Life Insurance against disobedience of number of regulatory provisions. It was the highest fine on any insurer. IRDA tested HDFC Life Insurance from 26 July 2010 to 30 July 2010.
IRDA was fined on 21 cases of cancelled death claims under home loan protection policies under the 90 days exclusion clause. It was fined with 1.05 crore rupees and ordered the company to claim and settle them within 30 days of its order.IRDA also fined HDFC Standard Life 35 Lakh for making extra payment to four groups of companies - HDFC, HDFC Bank, HDFC Securities and HDB Financial Service for services like selling policies, marketing expenses and others.
IRDA ordered HDFC Standard Life to pay the penalty within 15 days. IRDA chairman J. Hari Narayan, directed that the penalty should be debited to the shareholders' account and not to the policyholders account.
Before HDFC Life, Irda had fined on ICICI Prudential Life Insurance of Rs 1.18 crore for violations that include paying agents and broker’s commissions exceeding the permissible limits on May 2012. ICICI Prudential penalty is the second highest imposed penalty by the regulator after HDFC Life.
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