Insurance regulator IRDAI has imposed a ₹1-crore penalty on Chola MS General Insurance Company holding that the insurer has violated certain provisions of the Motor Insurance Service Provider (MISP) Guidelines.
The March-8 order, issued by IRDAI Chairman Subhash C. Khuntia, said the insurer had engaged with and made payments towards display of advertisement material with four MISPs from November 2, 2017 to December 31, 2019 in contravention of provisions of the Guidelines.
“The violation continued for a period of more than two years. Therefore, the Authority imposes a penalty of ₹1 crore,” the order said.
“The insurer is directed to ensure in future that any engagement with automotive dealers is strictly in compliance with MISP Guidelines.”
The charge against Chola MS General Insurance was it made indirect payments to MISP, automotive dealers and designated persons in the name of ‘advertisement’ and ‘professional charges’. The Guidelines stipulate the maximum distribution fees payable to MISPs and mention that neither the insurer should pay directly or indirectly to the MISP other payments, including the advertising expenses, nor the MISP should receive such payments from insurers, the order said.
On an another charge against Chola MS General Insurance Company that it provided partial data, documents and information to IRDAI, the order said non-submission of the documents by the insurer to enable proper inspection is viewed seriously. The insurer is directed to ensure prompt submission of information/documents during the course of future inspections.