Insurance Act, 2022

138. May impose fine: (1) If an insurer, insurance intermediary or other insurance service provider fails to prepare a statement, report or document required to be prepared, fails to give information required to be given, fails to submit documents or statements within the prescribed time, or fails to make available documents, statements, data or records requested by the Authority or any official deputed by the Authority for that purpose during regulation, inspection or monitoring within the prescribed period, the Authority may, in addition to other penalties mentioned in this Act, impose a fine as follows:-
 (a) in the case of an insurer, twenty-five thousand rupees per day for up to one week overdue, and in the case of an insurance intermediary or other insurance service provider, two thousand rupees per day,
 (b) in the case of an insurer, fifty thousand rupees per day for up to two weeks overdue, and in the case of an insurance intermediary or other insurance service provider, five thousand rupees per day,
 (c) after the period in clause (b) expires, one hundred thousand rupees per day for an insurer at any time, and ten thousand rupees per day for an insurance intermediary or other insurance service provider.

(2) If an insurer fails to have a loss assessment done within the prescribed time, the Authority may impose a fine on the insurer as follows:-
 (a) five thousand rupees per day for up to one week overdue,
 (b) ten thousand rupees per day for up to two weeks overdue,
 (c) after the period in clause (b) expires, twenty-five thousand rupees per day at any time.

(3) If an insurer fails to determine liability for a claim within the prescribed period, or determines liability in a detrimental manner, or fails to settle the liability within the prescribed time, the Authority may, depending on the nature and gravity of the matter, impose a fine ranging from two hundred thousand rupees to two million rupees.

(4) If an insurer does any act contrary to this Act or any rule, regulation, direction or order made under this Act, or fails to comply with a direction or order issued by the Authority, or carries on insurance business without complying with the procedure under this Act, or prepares false statements, the Authority may impose a fine as follows:-
 (a) for the first time, two hundred thousand rupees,
 (b) for the second time, two million five hundred thousand rupees,
 (c) for the third time or more, five million rupees per time.

(5) If an insurer fails to submit a compliance report, the Authority may impose a fine ranging from one hundred thousand rupees to three hundred thousand rupees.

(6) If an insurance intermediary does any act contrary to this Act or any rule, regulation or directive made under this Act, or carries out insurance-related work without complying with the procedure under this Act, or prepares false statements, the Authority may impose a fine as follows:-
 (a) for the first time, five thousand rupees,
 (b) for the second time, twenty-five thousand rupees,
 (c) for the third time or more, fifty thousand rupees per time.

(7) If an insurer fails to have an audit conducted within the period required under section 87, the Authority may impose a fine on such insurer as follows:-
 (a) for up to the first week, fifty thousand rupees,
 (b) for more than one week up to one month, one hundred thousand rupees,
 (c) for more than one month up to three months, five hundred thousand rupees,
 (d) for more than three months, for any period, one million rupees.

(8) If an insurer, director, officer, employee or insurance intermediary or other insurance service provider is asked to submit a response pursuant to subsection (2) of section 128 or subsection (3) of section 129 and fails to submit the response within the deadline, the Authority may impose a fine as follows:-
 (a) one hundred thousand rupees for the insurer,
 (b) five thousand rupees for the director, officer, employee, insurance intermediary or other insurance service provider of the insurer.

(9) If a surveyor submits a report on loss assessment later than the prescribed time, the Authority may impose a fine on such surveyor for such delay as follows:-
 (a) two thousand rupees for up to one week from the expiry of the period,
 (b) five thousand rupees for up to two weeks from the expiry of the period,
 (c) ten thousand rupees for up to one month from the expiry of the period,
 (d) twenty-five thousand rupees for any period after one month from the expiry of the period.

(10) If, during an investigation or inquiry upon a complaint or during regulation, inspection or monitoring by the Authority, it is found that any insurance surveyor has submitted a report making an incorrect assessment of loss, the Authority may, for the first time, warn or impose a fine of fifty thousand rupees or both, and if the same act is repeated, cancel his/her license, impose a fine of one hundred thousand rupees, and recover from him/her an amount equal to the loss caused to the policyholder and pay it to the policyholder.

(11) Notwithstanding anything contained in prevailing law, if it is found that a person who has committed an act liable to a fine under this section has kept or hidden the property earned thereby in his/her own name, the name of his/her immediate family, relatives or any other person, a letter shall be sent to the concerned body for confiscation of such property and the proceeds thereof, and it shall be the duty of that body to act accordingly.

(12) A party aggrieved by a penalty imposed by the Authority under this section may appeal to the concerned High Court within thirty-five days of receiving the penalty.