Indusind Bank has been slapped a Rs 15 lakh by ther Insurance Regulatory and Development Authority for violating corporate agency norms.
The data submitted by Cholamandalam General Insurance showed that the bank had received higher payments than permissible from the insurer as a corporate agent.
The private sector lender is a corporate agent of Cholamandalam General Insurance Company and Aviva Life Insurance Company.
After inspecting, the regulator said that it was evident that the payouts made in the form of infrastructure services were linked to the premium income generated by the corporate agent. "The charges are therefore established that the payments were received by the corporate agent apart /over and above the permissible commission rates in violation of Section 40A(3) of Insurance Act, 1938. The payments were received in the form of database sharing/incentives to the employees of corporate agent and infrastructure setting up costs for the three financial years commencing from 2007-08" IRDA said in an order.
The regulator asked Indusind Bank to pay Rs 5 lakh fine for each of the three financial years, totalling Rs 15 lakh within 15 days.
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