Lok Sabha Question No. 3748 (UNSTARRED), answered on 2017-03-24
Subject: Irregularities by Insurance Companies
Ministry: FINANCE
Asked by: RAHUL KASWAN

## Government of India Ministry of Finance Department of Financial Services Lok Sabha Unstarred Question No. +3748

Friday, March 24, 2017/Chaitra 3, 1939 (Saka)

*3748. SHRI RAHUL KASWAN:

Will the Minister of FINANCE be pleased to state:

- (a) the number of private and foreign life insurance eompanies in the country at present and the number of companies approved during the last three years, Statel UT and companywise;
- b) whether the Government has received complaints regarding irregularities by the private insurance companies during the last three years;
- (c) if s0, the details thereof; State/UT including Rajasthan and company-wise; and
- (d) the action taken/being taken by the Government in this regard?

## Answer

Minister of State in the Ministry of Finance (Shri Santosh Kumar Gangwar)

- (a): As per Insurance Regulatory and Development Authority of India (IRDAD); twenty three private life insurance companies are registered with the IRDAI out of which twenty one life insurance companies are having joint venture partnership with the entities.   During the last three years, IRDAI has not granted certificate of registration to any life insurance company in India. foreign
- (b) & (c): IRDAI has not received any specific complaint on irregularities by Private Insurance Companies. However; IRDAI has received complaints/grievances from policyholders against the Private Insurance Companies. The details of the complaints received from policyholders are placed at Annexure-I.
- (d): IRDAI has taken up all the complaints with the respective insurers for redressal. Details of penalties   levied by IRDAI in  respect of violations by private insurance companies are placed at Annexure-II, III & IV respectively. during

| SNo   | State/UT                  | Private Life Insurers   | Private Life Insurers   | Private Life Insurers   | State/UT wise Policyholders' Complaints Private Non-Life Insurers   | State/UT wise Policyholders' Complaints Private Non-Life Insurers   | State/UT wise Policyholders' Complaints Private Non-Life Insurers   |
|-------|---------------------------|-------------------------|-------------------------|-------------------------|---------------------------------------------------------------------|---------------------------------------------------------------------|---------------------------------------------------------------------|
| SNo   | State/UT                  | 2013-14                 | 2014-15                 | 2015-16                 | 2013-14                                                             | 2014-15                                                             | 2015-16                                                             |
| 1     | Andaman & Nicobar Islands | 765                     | 225                     | 243                     | 85                                                                  |                                                                     | 66                                                                  |
| 2     | Andhra Pradesh            | 9783                    | 7851                    | 2873                    |                                                                     | 2941                                                                | 910                                                                 |
|       | Arunachal Pradesh         | 1041                    | 272                     | 309                     | 97                                                                  | 73                                                                  | 21                                                                  |
| 4     | Assam                     | 3103                    | 1886                    | 1329                    | 353                                                                 | 251                                                                 | 184                                                                 |
| 5     | Bihar                     | 8004                    | 5524                    | 3730                    | 720                                                                 | 757                                                                 | 622                                                                 |
| 6     | Chandigarh                | 4033                    | 2252                    | 1322                    | 166                                                                 | 112                                                                 | 112                                                                 |
| 7     | Chattisgarh               | 2978                    | 1830                    | 1096                    | 287                                                                 | 263                                                                 | 214                                                                 |
| 8     | Dadra & Nagar Haveli      | 205                     | 62                      | 70                      | 16                                                                  | 15                                                                  | 9                                                                   |
| 9     | Daman & Diu               | 104                     | 40                      | 55                      | 13                                                                  | 18                                                                  | 19                                                                  |
| 10    | Delhi                     | 25090                   | 18434                   | 13397                   | 7801                                                                | 6523                                                                | 5826                                                                |
| 11    | Goa                       | 802                     | 593                     | 390                     | 150                                                                 | 126                                                                 | 91                                                                  |
| 12    | Gujarat                   | 16602                   | 10298                   | 7335                    | 2580                                                                | 2422                                                                | 2130                                                                |
| 13    | Haryana                   | 14529                   | 10151                   | 6287                    | 3751                                                                | 3663                                                                | 3233                                                                |
| 14    | Himachal Pradesh          | 2360                    | 1873                    | 1070                    | 161                                                                 | 172                                                                 | 129                                                                 |
| 15    | Jammu & Kashmir           | 2294                    | 1722                    | 1024                    | 116                                                                 | 211                                                                 | 218                                                                 |
| 16    | Jharkhand                 | 6763                    | 4058                    | 2709                    | 417                                                                 | 411                                                                 | 332                                                                 |
| 17    | Karnataka                 | 9398                    | 7679                    | 5475                    | 3638                                                                | 4098                                                                | 3665                                                                |
| 18    | Kerala                    | 6561                    | 3305                    | 2263                    | 634                                                                 | 775                                                                 | 868                                                                 |
| 19    | Lakshadweep               | 11                      | 3                       | 6                       | 8                                                                   | 3                                                                   | 1                                                                   |
| 20    | Madhya Pradesh            | 11317                   | 6140                    | 4222                    | 1123                                                                | 943                                                                 | 891                                                                 |
| 21    | Maharashtra               | 48547                   | 42049                   | 28927                   | 8775                                                                | 8351                                                                | 6988                                                                |
| 22    | Manipur                   | 339                     | 146                     | 172                     | 21                                                                  | 10                                                                  | 11                                                                  |
| 23    | Meghalaya                 | 180                     | 121                     | 176                     | 21                                                                  | 21                                                                  | 22                                                                  |
| 24    | Mizoram                   | 48                      | 49                      | 97                      | 92                                                                  | 62                                                                  | 28                                                                  |
| 25    | Nagaland                  | 101                     | 52                      | 96                      | 13                                                                  | 13                                                                  | 7                                                                   |
| 26    | Orissa                    | 4845                    | 4243                    | 2396                    | 391                                                                 | 366                                                                 | 347                                                                 |
| 27    | Pondicherry               | 482                     | 239                     | 177                     | 52                                                                  | 51                                                                  | 63                                                                  |
| 28    | Punjab                    | 17499                   | 10895                   | 5978                    | 877                                                                 | 769                                                                 |                                                                     |
| 29    | Rajasthan                 | 12128                   | 8484                    | 5789                    | 1438                                                                | 1585                                                                | 1370                                                                |
| 30    | Sikkim                    | 336                     | 130                     | 107                     | 25                                                                  | 18                                                                  | 10                                                                  |
| 31    | Tamil Nadu                | 9450                    | 6747                    | 5495                    | 2520                                                                | 3366                                                                | 3392                                                                |
| 32    | Tripura                   | 216                     | 163                     | 171                     | 8                                                                   | 10                                                                  | 14                                                                  |
| 33    | Uttar Pradesh             | 37376                   | 21334                   | 14467                   | 4780                                                                | 4425                                                                | 3875                                                                |
| 34    | Uttarakhand               | 3211                    | 2096                    | 1532                    |                                                                     |                                                                     | 324                                                                 |
| 35    | Telangana                 |                         | 155                     |                         | 275                                                                 | 284                                                                 | 3052                                                                |
| 36    | West Bengal               | 28835                   | 16947                   | 13353 5813              | 1452                                                                | 1552 74                                                             | 1439                                                                |

## PENALTIES LEVIED BY THE AUTHORITY DURING FY 2013-14

| No.   | Name of Insurance Company   | Amount of Penalty (In Rs.)   | Date of receipt of Penalty   | Brief particulars of the violation committed                              | Lifel General   |
|-------|-----------------------------|------------------------------|------------------------------|---------------------------------------------------------------------------|-----------------|
|       | Tata AIA Life               | lakh                         | March 07 , 2014              | Violation of AML Guidelines issued IRDA by                                | Life            |
| 2     | HDFC ERGO General           | 5 lakh                       | October 08, 2013             | Non-fulfi Ilment of premium Quota under Motor Third Party (Declined pool) | General         |
|       | Reliance General            | 5 lakh                       | October 09,2013              | Non-fulfi Ilment of premium Quota under Motor Third Party (Declined pool) | General         |
|       | ICICI Lombard General       | 5 lakh                       | October 09,2013              | Non-fulfi Ilment of premium Quota under Motor Third Party (Declined pool) | General         |
| 5     | L&T General                 | 5 lakh                       | October 09,2013              | Non-fulfi Ilment of premium Quota under Motor Third Party (Declined pool) | General         |
|       | Bharti AXA General          | 5 lakh                       | October 11,2013              | Non-fulfi Ilment of premium Quota under Motor Third Party (Declined pool) | General         |
|       | SBI General                 | 5 lakh                       | October 08 , 2013            | Non-fulfi Ilment of premium Quota under Motor Third Party (Declined pool) | General         |
|       | IFFCO TOKIO General         | 5 lakh                       | October 08 , 2013            | Non-fulfi Ilment of premium Quota under Motor Third Party (Declined pool) | General         |
|       | Cholamandalam MS General    | 5 lakh                       | October 08 , 2013            | Non-fulfi Ilment of premium Quota under Motor Third Party (Declined pool) | General         |
| 10    | Future Generali India       | 5 lakh                       | October 08, 2013             | Non-fulfi Ilment of premium Quota under Motor Third Party (Declined pool) | General         |
| 11    | Royal Sundaram Alliance     | 5 lakh                       | October 08, 2013             | Non-fulfi Ilment of premium Quota under Motor Third Party (Declined pool) | General         |
| 12    | TATA AIG General            | 5 lakh                       | October 07 , 2013            | Non-fulfi Ilment of premium Quota under Motor Third Party (Declined pool) | General         |

## ANNEXURE IlI

|    | PENALTIES LEVIED BY THE AUTHORITY DURING FY 2014-15   | PENALTIES LEVIED BY THE AUTHORITY DURING FY 2014-15   | PENALTIES LEVIED BY THE AUTHORITY DURING FY 2014-15   | PENALTIES LEVIED BY THE AUTHORITY DURING FY 2014-15                                                                                                                                                                                                                                                                                      |                      |
|----|-------------------------------------------------------|-------------------------------------------------------|-------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------|
|    | Name of the Entity                                    | Amount of Penalty (in Rs.)                            | Date of issuance of penalty order                     | Brief particulars ofthe violation committed                                                                                                                                                                                                                                                                                              | Life General/ Health |
|    | Shriram General                                       | 500,000                                               | 7/11/2014                                             | Violation of circular no.IRDA/F&A/Cir/DRSH/183/08/2011 dated 11-08-2011, cir no.IRDA/F&A/064/Jan/05 dated 12-01-2015, dated 22-02-2015 and cir.no IRDA/F&I/Cir/100/06/2010 dated 16-06-2010                                                                                                                                              | General              |
| 2  | ICICI Lombard General Ins Co.Ltd                      | 5,000,000                                             | 10/17/2014                                            | Violaiton of F&U guidelines, Section 42(7) of Insurance Act,1938, Circular ref no.IRDA/Cir/010/2003 dated 27/03/2003                                                                                                                                                                                                                     | General              |
| 3  | Apollo Munich Health                                  | 2,000,000                                             | 3/19/2015                                             | Violation of Section 42(0)(8), 40(1) & 64VB of Insurance Act, 1938 and circular ref no IRDA/Cir/010/2003 dated 27/03/2003.                                                                                                                                                                                                               | Health               |
|    | Reliance Life   Insurance Co Ltd                      | 17,700,000                                            | 4/11/2014                                             | Violation of provisions of Circular Ref: IRDA/Cir/004/2003 dated 14/02/2003, IRDA (Sharing of Database for Distribution of Insurance Products) Regulations, 2010, Clause C 4 & 7 of IRDA guidelines on Group Insurance issued vide circular no.01S/IRDA/Life/Circular/GI Guidelines/2005 dated 14-07-2005 and Section.42(7) of IA, 1938. | Life                 |
| 5  | Shriram Life Insurance                                | 500,000                                               | 7/11/2014                                             | Violation of circular no IRDA/F&A/Cir/DRSH /183/08/2011 dated 11-08-2011, cir no.IRDA/F&4/064/Jan/05 dated 12-01-2015, cir no.IRDA/Cir/F&4/073/Feb-05 dated 22-02-2015 and cir.no IRDA/F&I/Cir/100/06/2010 dated 16-06-2010                                                                                                              | Life                 |
|    | Sahara India Life Insurance                           | 500,000                                               | 7/23/2014                                             | Non fulfillment of obligations towards Social sector as specified in the IRDA (Obligations of insurers towards Rural or Social Sectors) Regulations, 2002.                                                                                                                                                                               | Life                 |
|    | Aegon Religare Life                                   | 4,000,000                                             | 9/17/2014                                             | Violation of Section 42(7) of Insurance Act; 1938, ciruclar ref no.IRDA/Cir/010/2003 dated 27-02-2003, clause 8.4 of Outsourcing Iguidelines dated 01-02-2011, clause of Corporate Agency guidelines dated 14-07-2005 and Regulation 19 of IRDA (Insurance Brokers) Regulations, 2002.                                                   | Life                 |
|    | Aviva Life Insuance                                   | 500,000                                               | 11/3/2014                                             | Violation of Regulation 3 of IRDA (Protection of Policyholders"Interests) Regulations, 2002                                                                                                                                                                                                                                              | Life                 |
| 9  | Sahara India Life Insurance                           | 2,500,000                                             | 11/3/2014                                             | Non fulfillment of obligations towards Social sector as specified at IRDA (Obligations of insurers towards Rural or Social Sectors) Regulations, 2002.                                                                                                                                                                                   | Life                 |
| 10 | Birla Sun Life Insurance                              | 1,500,000                                             | 12/1/2014                                             | Violation of Regulation 4 of IRDA (Micro Insurance) Regulations, 2005 and Regulation 8 2 & 3) of IRDA (Protection of Policvholders' Interests) Regulations, 2002                                                                                                                                                                         | Life                 |
| 11 | Canara HSBC OBC Life                                  | 3,100,000                                             | 12/12/2014                                            | For making payments to Insurance Agents in violation of clause 21 of the Corporate Agents guidelines circular ref.no.017/IRDA/Cir/CA guidelines/2005 dated 14-07-2005 read with Section.40A of Insurance Act,1938.                                                                                                                       | Life                 |
| 12 | Max Life Insurance Co                                 | 5,500,000                                             | 12/18/2014                                            | Violation of clause 9.6(ii) of Outsourcing guidelines circular dated 01-02-2011.                                                                                                                                                                                                                                                         | Life                 |

## PENALTIES LEVIED BY THE AUTHORITY DURING FY 2015-16

## ANNEXURE IV

| No   | NName of the entity                         | Amount 0f Penalty (in Rs)   | Date of issuance of penalty order   | Brief particulars of the violation committed                                                                                                                                                                                                                     | Life/ General   |
|------|---------------------------------------------|-----------------------------|-------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------|
|      | India First Life Insurance Co Ltd           | 6,500,000                   | 5/27/2015                           | Violation of Section 40(1), 4O(A) of Insurance Act, Corporate agents, F&U and group insurance guidelines and IRDA (Protection of Policyholders' Interests) Regulations, 2002.                                                                                    | Life            |
|      | Future Generali India Life Insurance Co Ltd | 5,000,000                   | 6/9/2015                            | Violation of provisions of IRDA (Registration of Insurance Companies) Regulation, 2000, Section 40(1) & 42(7) of Insurance Act,1938, IRDA (Sharing of Database) Regulations; 2010, corporate agents guidelines and IRDA (Protection                              | Life            |
|      | India First Life Insurance Co Ltd           | 500,000                     | 7/3/2015                            | of Policyholders' Interests) Regulations, 2002 Violation of Section 40 (1) of the Insurance Act, 1938 and Clause 21 of the Circular 017/IRDA/Circular/CA guidelines/2005 dated 14th July 2005 issued under IRDA (Licensing of Corporate Agents) Regulations,2002 | Life            |
|      | Tata AIA Life Insurance Co Ltd              | 1,000,000                   | 7/3/2015                            | Violation of Clause 21 the Circular 017/IRDA/Circular/CA guidelines/2005 dated 14th July 2005 issued under IRDA (Licensing of Corporate Agents)Regulations, 2002                                                                                                 | Life            |
| 5    | Reliance Life Insurance Co Ltd              | 8,500,000                   | 8/6/2015                            | Violation of Outsourcing guidelines and Corporate Governance guidelines:                                                                                                                                                                                         | Life            |
|      | Reliance Life Insurance Co Ltd              | 500,000                     | 9/10/2015                           | Violation of Reg 2(g)(i) of IRDA (Registration of Indian Insurance companies) Regulaiton, 2000                                                                                                                                                                   | Life            |
|      | ICICI Life Insurance Co Ltd                 | 500,000                     | 10/9/2015                           | Violation of Outsourcing guidelines.                                                                                                                                                                                                                             | Life            |
|      | IDBI Federal Life Insurance Co Ltd          | 1,600,000                   | 11/4/2015                           | Violation of   Group Insurance   guidelines, F&U guidelines, Section 40A(1) & 40(1) of Insurance Act,1938 and IRDA (Licensing of Corporate Agents) Regulations, 2002                                                                                             | Life            |
|      | Exide Life Insurance Co Ltd                 | 1,100,000                   | 3/21/2016                           | Violation of Section 45 of Insurance Act, Group Insurance Guidelines and IRDA (Licensing of Corporate Agents) Regulations,2002                                                                                                                                   | Life            |
| 10   | Star Union Dia-ichi Life Insurance Co Ltd   | 100,000                     | 3/22/2016                           | Violation of Group Insurance guidelines                                                                                                                                                                                                                          | Life            |
| 11   | Reliance General Insurance Co Ltd           |                             | 4/10/2015                           | Violaiton of IRDA (Health Insurance) Regulation; 2013                                                                                                                                                                                                            | General         |
| 12   | Chola MS General Insurance Co. Ltd          | 100,000                     | 4/24/2015                           | Marketing of product named 'Chola MS Corporate Travel Insurance' without approval of the Authority                                                                                                                                                               | General         |
| 13   | L&T General Insurance Co Ltd                | 5,000,000                   | 7/30/2015                           | Violation of F&U guidelines, Distance Marketing guidelines, IRDA (Protections of  Policyholders' Interests) Regulations,2002 and Section.40(1) and 420(8) of Insurance Act,1938.                                                                                 | General         |
| 14   | Bajaj Allianz General Insurace Co Ltd       | 1,500,000                   | 7/31/2015                           | Violation of   Section 64VB,40(1) & 42d(8) of Insurance Act and commission circular dated 25/08/2008                                                                                                                                                             | General         |
| 15   | ICICI Lombard General Insurance Co Ltd      | 1,000,000                   | 9/3/2015                            | Violation of F&U guidelines and Section 64VB of Insurance Act, 1938.                                                                                                                                                                                             | General         |
| 16   | Reliance General Insurance Co Ltd           | 500,000                     | 9/10/2015                           | Violation of provisions of Reg 2(g)i)   of IRDA (Registration of Insurance Companies) Regulation, 2000                                                                                                                                                           | General         |
| 17   | Chola MS General Insurance Co. Ltd          | 2,500,000                   |                                     | Violation of F&U guidelines, Section 64VB of Insurance Act,1938, IRDA (Sharing of Database) Regulations, 2010 and IRDA (Protection of Policyholders") Regulations, 2002.                                                                                         | General         |
| 18   | Iffco-Tokio General Insurance Co Ltd        | 1,000,000                   | 1/7/2016                            | Violation of F&U guidelines and provisions of IRDA (Licensing of Corporate Agents) Regulations, 2002.                                                                                                                                                            | General         |
| 19   | Universal Sompo General Insurance Co Ltd    | 1,500,000                   | 1/7/2016                            | Violation of F&U guidelines, additional payouts to licensed entities,  guidelines on solicitation of business and IRDA (Sharing of Database) Regulations, 2010.                                                                                                  | General         |