Finding it guilty on multiple counts, Insurance Regulatory and Development Authority of India (IRDAI) has slapped a penalty of Rs 1.11 crore on insurance web aggregator Policybazaar and has also issued a stern warning against violation of rules in future.
The regulator has directed the firm to deposit the penalty within 15 days from the receipt of the order.
The insurance regulator said that Policybazaar entered into a partnership with 'Indian Health Organization by Aetna' (IHO), a non-insurance entity, to offer incentives to its customers in violation of rules.
The incentives included complimentary wellness benefits for all new eligible customers and covered five OPD consultations, unlimited telemedicine consultations, unlimited second opinion services, among others.
IRDAI also said that Policybazaar displayed IHO’s services on its website in violation of regulations.
The regulator added that Policybazaar was advertising on television about a 60 percent discount on the motor insurance policy, which, according to IRDAI, leads to promoting the products of particular insurers. The company, however, clarified that it withdrew the advertisement after the regulator expressed concerns.
"lf the web aggregator feels aggrieved by the above decision in this order, an appeal may be prefered to the Securities Appellate Tribunal as per Section 110 of the lnsurance Act, 1938," the IRDAI order stated.
The IRDAI in its order said that Policybazaar had failed in complying with the Regulations on Insurance Web Aggregator Regulations issued in 2013 and 2017 which had been created to protect the interest of the policyholders and regulate the business of web aggregation.
"This is evident from the penalties and the warning issued for violations of Insurance Web Aggregator Regulations," it said.
Policybazaar Insurance Web Aggregator Pvt Ltd is the largest web aggregator in the country. Being a pioneer in online distribution space, it has changed the way insurance was sold and has created a name for itself.
(With inputs from IANS)