A recent press report said that the Insurance Regulatory and Development Authority (IRDA) has imposed a fine of Rs 70,00,000 on SBI Life Insurance company for paying around Rs.204 crore to eight of its corporate agents and six master policyholders, far in excess of the stipulated levels. SBI Life Insurance is 74:26 joint venture between State Bank of India (SBI) and BNP Paribas Cardif;
According to IRDA reports SBI life has made payments in violation of laid down guidelines. The company argued that the payments were reimbursement of administrative expenses incurred by master policyholders. But IRDA termed it as weak.
According to the guidelines issued by the IRDA under Section 34 of the Insurance Act no payment will be made towards management expenses, document expenses, profit commission, bulk discount or payment of any other description to the agent or group organiser or manager or a master policyholder.
Reports said that the payments were received from SBI Life Insurance by the agents and master policyholders between 2005-2010.
The eight corporate agents (associates of State Bank of India) and the six master policyholders are:
State Bank of India- Rs 127 crore
State Bank of Bikaner and Jaipur- Rs 8.44 crore
State Bank of Hyderabad- Rs 13.25 crore
State Bank of Indore- Rs 3.69 crore
State Bank of Mysore- Rs 8.28 crore
State Bank of Patiala- Rs 5.56 crore
State Bank of Saurashtra- Rs 3.31 crore
State Bank of Tranvancore- Rs 16.12 crore