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

Last updated: 07 May 2021

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The Insurance Regulatory and Development Authority of India (IRDAI) has issued an order regarding M/s. Shriram General Insurance Company Limited following an onsite inspection. The inspection revealed violations related to outsourcing activities with related parties and deviations in pricing for group policies. Consequently, Shriram General Insurance has been directed to discontinue current practices with group companies within three months and has been fined Rs. 6,00,000 for violating product filing procedures.

Insurance Regulatory and Development Authority of India Order Ref. No: IRDA/ENF/ORD/ONS/123/05/2021 Date:06-05-2021 Order in the matter of M/s. Shriram General Insurance Company Limited Based on the a) Show Cause Notice (SCN) ReferenceNo.IRDA/Enforcement/2020/417 dated 3rdFebruary, 2021 in connection with the onsite inspection conducted by Insurance Regulatory and Development Authority of India (the Authority/IRDAI) during 02.12.2019 to 06.12.2019 b) M/s. Shriram General Ins

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FAQ :

The IRDAI issued the order after an onsite inspection revealed violations concerning the outsourcing of activities to related parties and deviations from approved pricing for group policies.

The company violated Regulation 15(c) of the IRDAI (Outsourcing of Activities by Indian Insurers) Regulations, 2017, and provisions related to product filing and pricing guidelines for group policies.

Shriram General Insurance has been fined Rs. 6,00,000 for violating product filing procedures and guidelines.

The insurer must discontinue its current practices with group companies within three months, adopt a transparent approach on an arm's length basis for services, and ensure continuous compliance with product filing procedures. They must also remit the penalty within 45 days and confirm compliance with directions within 21 days.

The company failed to maintain an arm's length distance when dealing with a related party, M/s. Shriram Capital Limited, and the payments made lacked transparency regarding the specific services availed.

Notification No : IRDA/ENF/ORD/ONS/123/05/2021
Source : https://www.irdai.gov.in/admincms/cms/whatsNew_Layout.aspx?page=PageNo4471&flag=1

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