In short: The Insurance Regulatory and Development Authority of India (Irdai) fined SBI Life Insurance Rs 1 million for breaking laws pertaining to insurance web aggregators and outsourcing. It was discovered that the insurer had partnered with web aggregators without explicit contracts outlining services and costs, had neglected to disclose payments for outsourcing, and had rejected claims that had elapsed over the three-year mark.
SBI Life Insurance has been instructed by the Irdai to create a thorough outsourcing policy that complies with the rules and regulations in effect right now.
Irdai also found that SBI Life had repudiated multiple insurance claims beyond the 3-year period, which is not allowed under Section 45 of the Insurance Act. The insurer had to settle claims worth Rs 10.21 crore, including penal interest.
As a result, Irdai has directed SBI Life to establish a comprehensive outsourcing policy aligned with regulations. The insurer also has to present Irdai’s order to its board to review the effectiveness of its systems and processes for outsourcing and conflict resolution.
This action by the regulator is aimed at protecting policyholder interests and ensuring insurers adhere to the regulatory framework when it comes to outsourcing and claims settlement.
