IRDAI Order in the matter of M/s Flipkart Internet Pvt Limited

Violation of Regulation 14(v) & Clause III of Schedule III read with Regulation 26 of IRDAI (Registration of Corporate Agents) Regulations, 2015, which reads as under:

Regulation 14(v):

“The corporate agent shall solicit and procure reasonable number of insurance policies commensurate with their resources and the number of specified persons they employ”.

The Authority observed that the CA procured over 70,000 policies in a year with only one specified person. Furthermore, the CA was found to be redirecting policyholders/customers to the helpdesk of insurers for assistance.

Warning and Advisory:

The Authority advised CA to maintain an adequate number of Specified Persons for effective solicitation and servicing of policyholders.

Violation of Clause 15.1(b) of Insurance E-commerce Guidelines, 2017, which reads as under:

Clause 15.1(b):

“The applicant’s ISNP shall enroll only those market participants that are granted certificate of registration by the Authority.

Explanation: It is clarified that an insurer can enroll only insurance intermediaries on its Insurance Self-Network Platform and no other insurer.

An insurance intermediary can enroll only insurers to the extent allowed under the respective regulations on its ISNP and no other insurance intermediary or an insurance agent.”

The Authority observed that the CA redirected the customers from its ISNP-approved website to the platform of another insurance intermediary, creating an unauthorized distribution channel.

Penalty:

The Authority, in the exercise of powers conferred under Section 102(b) of the Insurance Act, 1938, imposed a penalty of ₹1,00,00,000/- (Rupees One Crore only) on the CA.

Violation of Regulation 8(A) of IRDAI (Registration of Corporate Agents) Regulations, 2015.

Regulation 8(A):

‘Every applicant, who is a company incorporated under the Companies Act, 2013 and has a majority of shareholding of foreign investors, shall furnish an undertaking as given in Schedule – AA.’

The Authority observed that the CA failed to submit the Schedule AA undertaking as required and did not have a majority of resident Indian directors on its board.

Warning and Advisory:

CA is advised to ensure strict adherence to regulatory requirements in the future to prevent similar lapses.

Violation of Clause 3(ii)(a) of Schedule III read with Regulation 26 of IRDAI (Registration of Corporate Agents) Regulations, 2015.

Clause 3(ii)(a) of Schedule III:

No corporate agent/principal officer/specified person shall solicit or procure insurance business without holding a valid registration/certificate.

Regulation 26 – Code of Conduct for Corporate Agents:

(1) Every Corporate Agent shall abide by the Code of Conduct as specified in Schedule III of these regulations.

(2) The corporate agent shall be responsible for all the acts and omissions of its principal officer, specified persons and other employees including violation of code of conduct specified under these regulations and liable to a penalty which may extend to one crore rupees under the provisions of Section 102 of the Act.

The Authority observed that the CA continued soliciting and procuring insurance policies even after the expiry of its Certificate of Registration.

Penalty:

The Authority, in exercise of powers vested under Section 102(b) of the Insurance Act, 1938, imposed a penalty of ₹6,00,000/- (Rupees Six Lakh only) on the CA.