Order in the matter of M/s Chola MS General Insurance Company Ltd

Last updated: 10 March 2021

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The Insurance Regulatory and Development Authority of India (IRDAI) has issued an order against M/s Chola MS General Insurance Company Ltd following an inspection and subsequent notices. The company was found to have violated provisions related to the Guidelines on Motor Insurance Service Provider (MISPG). Specifically, Chola MS made indirect payments to MISPs, including automotive dealers, under the guise of 'advertisement' and 'professional charges', which contravened the established guidelines. Additionally, the company was found to have not promptly submitted required documents during the inspection process.

Insurance Regulatory and Development Authority of India Ref: IRDA/NL/ORD/MISC/039/03/2021 Order in the matter of M/s Chola MS General Insurance Company LtdBased on the (i) Show Cause Notice (SON) reference No. IRDAI/ NUChola/SCN/233/2020-21 dated 9th October, 2020 in connection with the on-site inspection conducted by the Insurance Regulatory and Development Authority of India (the Authority or IRDAI) from 1st to 4th May, 2018. (ii) Response of M/s. Chola MS General Insurance Company

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FAQ :

The IRDAI issued the order due to Chola MS General Insurance Company Ltd violating provisions of the Guidelines on Motor Insurance Service Provider (MISPG), particularly concerning indirect payments to MISPs and their associates.

Chola MS made indirect payments to Motor Insurance Service Providers (MISPs) and automotive dealers under headings like 'advertisement' and 'professional charges', which is a violation of Guideline 15 (5) (d) of the MISP Guidelines. They also failed to promptly provide required documents and information during the inspection.

Chola MS was fined Rs 1 Crore for violating Guideline 15 (5) (d) of the MISP Guidelines by continuing engagement and payments to certain MISPs for advertisement display over an extended period.

Besides the penalty, Chola MS was directed to ensure prompt submission of information and documents during future inspections and to strictly comply with MISP Guidelines for any future engagements with automotive dealers.

The IRDAI conducted an on-site inspection of M/s Chola MS General Insurance Company Ltd from 1st to 4th May 2018.

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Notification No : IRDA/NL/ORD/MISC/039/03/2021
Published in Miscellaneous
Source : https://www.irdai.gov.in/ADMINCMS/cms/whatsNew_Layout.aspx?page=PageNo4393&flag=1

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