SBI Life Insurance fined heavily, IRDA warns for rejecting death claim

IRDAI: Insurance sector regulator IRDAI has imposed a fine of Rs 1 crore on SBI Life Insurance. The company was accused of violating the rules related to outsourcing and insurance web aggregators. Apart from this, IRDAI has instructed the insurance company to be careful regarding death claims. No negligence should be done in such cases.

The company violated many rules and guidelines

IRDA has said that SBI Life Insurance had associated with web aggregators without making any agreements related to services and fees. These include Policybazaar, MIC Insurance, Compare Policy, Easypolicy and Wishfin. Apart from this, the company also did not give correct information about outsourcing payments. Also, three-year old claims were rejected. IRDA has directed SBI Life Insurance to make an outsourcing policy according to all the rules and guidelines.

SBI Life Insurance is not making the rules clear in the agreement

The company had claimed that it had handed over post-sale work like premium reminders and policy service assistance to web aggregators. IRDA said that clear information has not been given in the agreement about this. The regulator has come to know that the company has made a payment of Rs 1.93 crore to Extent Marketing and Technologies between the financial years 2017-18 to 2018-19. SBI Life Insurance had also not given information about this payment. The company’s vendors were also working through outsourcing. 95 percent of their revenue was being transferred to third parties.

Rules were not followed in rejecting the insurance claim

Apart from this, IRDA has asked the company to follow the Insurance Act properly. According to IRDA, SBI Life Insurance had rejected 21 insurance claims. The company said that these claims were rejected due to death within three years of the policy being issued. However, the company could not provide sufficient evidence to IRDA in support of this.

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