Kathmandu. The Insurance Regulatory and Development Authority of India (IRDAI) has imposed a penalty of Rs 1 crore on Reliance General Insurance (GI) for violation of various regulatory frameworks.
According to the Asian Insurance Post, the regulator conducted an on-site inspection of the company from December 27, 2021 to December 31, 2021. During the inspection, the company was found violating the Insurance Act, 1938 and various directives and circulars issued by the authority.
The inspection report pointed out two major financial irregularities within the company:
1) Suspicious payments to the brokers’ parent institution: FY 2018. On May 19, Reliance General was found to have paid about Rs 5.16 crore to Glitterbug Technologies Pvt. Ltd. Glitterbug is the parent company of Coverfox Insurance Broking. During the inspection, the regulator said that although the payment was made in the name of consumer awareness program, there was no correlation between the invoice submitted by the company and the scope of the agreement. Also, Glitterbug director Sanjeev Jha has been found to be a director on Coverfox, which shows a conflict of interest.
2) Arbitrary payment to the agent of another company: The company has been found to have made a large amount of money illegally to an agent of Oriental Insurance Company Limited. According to the report, these agents were awarded the financial year 2018. Rs 1.14 crore in 2019. 2.7 million in 2020 and 2020. In 2021, Rs 28.67 lakh was paid arbitrarily.
Currently, this insurance company is operated under the name of IndusInd General Insurance.
