Order in the matter of M/s Shriram Life Insurance Company Limited

• Regulation 8(1), 10(1)(i) and 10(1)(iii) of IRDAI (Protection of Policyholders’ Interest) Regulations, 2017.
• Clause 6 of the Guidelines on Corporate Governance for Insurers in India.

• SLIC accepted Free Look Cancellation (FLC) requests after expiry of 15/30 days from receipt of policy documents by customers.
• There were delays in receipt of documents from selected grievance samples.
• The Insurer failed to maintain acknowledgement/details of receipt of documents by customers during FY 2017-18, FY 2018-19 and FY 2019-20.
• The Insurer refunded premiums after 15 days of receipt of requests and failed to deduct applicable mortality charges in certain cases.
• The Insurer failed to resend policy documents despite complaints from customers.
• The Insurer continued to face operational challenges despite implementing improvements.

Caution and Advisory:

• The Authority cautioned SLIC and advised strict compliance with Regulation 8(1), 10(1)(i) and 10(1)(iii) of the Regulations.

• Section 45(1), 45(2) and 45(4) of the Insurance Act, 1938.
• Clause C of Circular on Insurance Fraud Monitoring Framework.
• Clauses 6 and 7.3 of Corporate Governance Guidelines, 2016.

• The Insurer cancelled more than 38 policies after three years of issuance and forfeited premiums without prior notice and proper investigation.
• The Insurer failed to establish adequate systems for identifying attempted fraud and misrepresentation.
• The Insurer cancelled policies instead of adjusting policy terms in cases of age misstatement as permitted under Section 45(5) of the Insurance Act.
• The Insurer cancelled 43 policies after expiry of the three-year period prescribed under Section 45 of the Act.

Warning and Advisory:

• The Authority warned SLIC for violation of Section 45 of the Insurance Act, 1938.
• The Authority advised compliance with the Insurance Fraud Monitoring Framework and Corporate Governance Guidelines.

• Regulation 8(6), Regulation 10(1)(iii) and Regulation 14(2)(v) of IRDAI (Protection of Policyholders’ Interest) Regulations.
• Clause 6 of Corporate Governance Guidelines.
• Circular No. IRDA/INSP/CIR/ONS/157/09/2018 regarding data submission for onsite inspections.

• The Insurer delayed acknowledgement and resolution of grievances.
• The Insurer delayed processing of FLC requests and refund of premiums.
• The Insurer delayed policy issuance beyond 15 days in approximately 4.65% policies during FY 2019-20.
• There were delays in dispatching policy documents.

Caution and Advisory:

• The Authority advised SLIC to establish adequate systems for regulatory compliance relating to FLC requests, policy bond dispatch and grievance handling.
• The Insurer was directed to ensure prompt grievance redressal and timely processing of FLC requests and premium refunds.

• Clause 3.1.13.i(c) and Clause 3.1.VIII of AML/CFT Master Circular dated September 28, 2015.
• Clause 6 of Corporate Governance Guidelines.

• The Insurer issued policies where annualised premiums exceeded annual income of policyholders during FY 2017-18, FY 2018-19 and FY 2019-20.
• The Insurer failed to conduct proper due diligence where policyholders submitted Form 60 despite income exceeding taxable limits.

Caution and Advisory:

• The Authority cautioned SLIC and advised implementation of proper processes for assessment of policyholders before policy issuance.
• The Insurer was advised to obtain standardized and verifiable proof of income.
• The financial underwriting process shall be standardized through an SOP approved by PPGR&CM.