Kathmandu. The Indian insurance regulator has imposed a cash penalty of Rs 1crore (Rs 1.6 crore) on non-life insurer Eco General Insurance for making several regulatory provisions in the financial year 2019-20.
According to a statement issued by the regulator, the insurance company has violated the rules regarding outsourcing (responsibility of regular work to third parties) and payment of commission to insurance intermediaries. The order signed on May 19 by Finance and Investment Member Rajya Kumar Sinha and Non-Life Member Deepak Sood said.
The regulator said in the order that insurance companies should avoid or minimize any conflict of interest while outsourcing.
The IDAI circular states that even where outsourcing and intermediaries have been given the responsibility of the job, the insurer must comply with all regulatory obligations. And, the responsibility of due diligence and monitoring of outsourced service providers and services provided cannot be abdicated.
