IRDA imposes Rs 2 lakh fine on MetLife Insurance

 

IRDA said “the insurer (MetLife) did not pay sufficient attention in promptly communicating the underwriting decision as well as in refunding the proposal deposits collected from the complainant within the prescribed timelines”

New Delhi: The Insurance Regulatory and Development Authority (IRDA) has imposed a fine of Rs2 lakh on private sector insurer MetLife for failure to follow norms while issuing policy, reports PTI.

“IRDA is satisfied that there has been negligence on the part of the insurer (MetLife India Insurance Company) and consequently imposes a penalty of Rs2 lakh,” said an order issued by the regulator.

IRDA has passed the order in connection with the delay in communicating the status of life insurance policy to one Suresh Chukkapalli.

Under the IRDA regulations, an insurer is required to process a proposal with speed and efficiency and communicate the decision to the applicant within 15 days of the receipt of proposal.

IRDA said “insurer (MetLife) did not pay sufficient attention in promptly communicating the underwriting decision as well as in refunding the proposal deposits collected from the complainant within the prescribed timelines.”

 

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Insurers seek IRDA nod for 22 revised pension products

 

IRDA in November 2011 had asked all insurers selling pension products to disclose in the policy document maturity benefits for customers or else withdraw them from 1 January 2012. As per the guideline, policy documents must explicitly define assured benefit in case of death of the policyholder

New Delhi: Insurance companies have approached the Insurance Regulatory and Development Authority (IRDA) for review of 22 pension products fearing they may not be conforming to the regulator's guidelines pertaining to assured returns.

“Insurance companies had filed 22 revised products as on date out of which 21 products were filed only in the month of December 2011,” IRDA said.

IRDA in November 2011 had asked all insurers selling pension products to disclose in the policy document maturity benefits for customers or else withdraw them from 1 January 2012.

As per the guideline, policy documents must explicitly define assured benefit in case of death of the policyholder.

While filing the revised products, the insurers have also sought certain clarifications on the guidelines.

Clarifying the doubts in the event of the death of a policyholder, IRDA said “...during the term of the contract, the successor to the policyholder shall be entitled to receive a sum equal to the premium paid at the guaranteed rate of return”.

IRDA also said the insurer offering pension products shall guarantee either a non-zero rate of return on premiums paid or an absolute amount and it should be disclosed at the time of purchase of the policy.

There are 23 life insurance companies operating in India selling pension schemes.

 

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RBI for greater role of CAs in ensuring solvency of banks

 

RBI deputy governor KC Chakrabarty said that the review of banks by auditors transcend the ordinary to enable them to critically analyse the operations of banks they audit and recommend improvements to the internal control framework

Mumbai: Seeking to enhance role of auditors in ensuring solvency of banks, the Reserve Bank of India (RBI) wants chartered accountants to ask pointed questions concerning risk assessment and capital adequacy of lenders, reports PTI.

“Auditors will need to move beyond narrow transactions audit consideration to look at the larger picture. They will need to ask pointed and relevant questions (from banks)”, RBI deputy governor KC Chakrabarty said while addressing a conference of ICAI on banking sector audit in Chennai recently.

In view of the problems being faced by the banking sector the world over, he said, “it is important ...that the auditors ask probing questions about the adequacy of banks' provisions and capital...there remains scope for more rigorous attention to the issues of adequacy of capital and provisions by auditors”.

The annual financial inspection of banks by the RBI reveals auditing ‘gaps’ which are needed to be bridged, he said. “The auditors need to concentrate on the audit of head office of banks as against audit of branches given the emergence of core banking, centralised record keeping and even centralised risk management”.

Mr Chakrabarty said the auditors should ask questions like “Do decisions in the bank take adequate cognisance of risk considerations? Do banks adequately understand the risk reward characteristics of product/market/business they are entering into?” 

The review of banks by auditors, he said, should transcend the ordinary to enable them to critically analyse the operations of banks they audit and recommend improvements to the internal control framework.

 

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