IRDAI Imposes Rs1 Crore Penalty on Muthoot Risk Insurance and Broking Services for Selling Insurance Through Unqualified BDMs
Moneylife Digital Team
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Insurance Regulatory and Development Authority of India (IRDAI) has imposed a penalty of Rs1 crore on Muthoot Risk Insurance and Broking Services Pvt Ltd, a sister concern of Muthoot Fincorp Ltd (MFL), for procuring business from branch network of MFL and using unqualified employees for solicitating insurance business.
In an order, TL Alamelu, member (non-life) of IRDAI, says, "As per the records available and further submission made by the broker post personal hearing; it is observed that the broker has been engaging unlicensed individuals in the name of business development managers (BDMs) since the year 2016-17 for solicitation of life insurance business. Hence, considering that the violation continued for more than 100 days, by virtue of powers vested under Section 102 (b) of the Insurance Act, 1938, the Authority levies a penalty of Rs1 crore, which is calculated by applying the prescription 'Rs1 lakh for each day during which such failure continues or one crore rupees, whichever is less'."