Cutting down the penalty recommended by its Adjudicative Officer by Rs 70 lakh, the Insurance Regulatory and Development Authority of India (IRDAI) has penalized SBI General Insurance Company Ltd Rs 30 lakh for repeatedly violating Insurance Act and the regulations.
The charge against SBI General Insurance Company was that it had repeatedly failed to comply with Section 32D of the Insurance Act and the IRDAI (Obligation of Insurer in respect of Motor Third Party Insurance Business) Regulations, 2015 that mandates underwriting of minimum motor third party insurance business.
The SBI General Insurance violated Section 32D during 2018-19, 2016-17, and 2017-18.
According to IRDAI, the insurer should have underwritten motor third party insurance business of Rs 638.34 crore but did only Rs.316.36 crore resulting in a shortfall of Rs.321.98 crore.
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Similarly, during 2016-17 and 2017-18, the shortfall was Rs 146.11 crore and Rs 104.60 crore respectively.
The Adjudicative Officer had recommended a penalty of Rs 1 crore.
Deciding to cut down the penalty by Rs.70 lakh, the IRDAI Chairman Subhash C Khuntia in his order said taking into account the repetitive nature of violation and the submissions of the insurer that they have fulfilled and marginally exceeded their obligations for financial years 2019-20 and 2020-21 a penalty of Rs 30 lakh is imposed on SBI General Insurance.