Insurance regulator IRDAI has imposed a penalty of Rs 10 lakh on SBI Life Insurance Company for violations of various norms.
Inspection reports indicated that it had done 621 policies after expiry of licence.
Authority renewed the expired licence of the corporate agent from a retrospective date i.e licence expiry date, which is only for operational convenience but doesn’t mean that insurer is allowed to procure business during the licence expiry period while the renewal application was under process.
It is the duty of the insurer and corporate agent to get the licensed renewed well before the due date with submission of all required documents.
Though commission is not released by insurer on the business accepted after the licence expiry until the licence renewal by Authority, insurer act on accepting business is “not justified” while the renewal application is under process and when a decision can be on either side.