IRDAI imposed a fine of Rs 5 crore on Policybazaar, know the truth of “Top ULIP Ranking”, keep an eye on the stock:

News Topical, Digital Desk : Insurance regulator IRDAI has imposed a total fine of Rs 5 crore on Policybazaar for 11 violations of the Insurance Act and IRDAI (Insurance Web Aggregators) Rules, 2017. According to the IRDAI order, Policybazaar has violated several rules. The company's key management personnel (KMPs) held directorships in other companies without prior permission from IRDAI. The company promoted certain insurance products in a biased manner and ranked them as "top" or "best", without providing any concrete information to customers to make informed decisions.

Policybazaar delayed in delivering the premium received from policyholders to the insurance companies, for which an additional fine of Rs 1 crore was imposed.

Investigation was done in June
During the IRDAI investigation (1-5 June 2020), five ULIP plans were shown as "Top 5" on Policybazaar's website, which included Bajaj Allianz Goal Assure, Edelweiss Tokio Wealth Gain+, HDFC Click2 Wealth, SBI Life e-Wealth Insurance and ICICI Signature.

The website offered ULIP products of only five insurance companies. Whereas, Policybazaar also had an agreement with other insurance companies. In the health insurance segment, plans of 12 insurers were shown with ratings as "Top Plans", while it had agreements with 23 insurers. Promoting some products as "best" or "top" limited the choice of customers and there was a lack of transparency. What is the IRDAI rule? According to IRDAI rules, the web aggregator should not give preference to any one insurer over the other. Words like "best", "top" or "number 1" can be used only if it is based on verified third-party data and is transparent. Delay in premium deposit Policybazaar mostly used its own payment gateway and nodal account to collect premium. As per Section 64VB of the Insurance Act, 1938, insurers have to deposit the premium within 24 hours of receipt, but Policybazaar delayed it.

On investigation of 67 policies, delay of more than 30 days in depositing premium was found.
There was a delay of 5 to 24 days in 8,971 policies.
Premium in 77,033 policies was deposited after 3 working days.

Telemarketing irregularities
Policybazaar sold 97,780 policies without any authorised verifier (AV), while rules require that every policy sold through telemarketing be linked to an AV. Out of a total of 4,32,366 telemarketed policies, these were "unassessed" or "unmapped", making it impossible to ascertain who sold them.