SBI Life Insurance Fined ₹1 Crore: Regulatory Crackdown Explained

In a landmark decision, the Insurance Regulatory and Development Authority of India (IRDAI) has imposed a fine of ₹1 crore on SBI Life Insurance for several regulatory breaches. This move underscores the authority's commitment to enforcing compliance and protecting policyholders' interests.

SBI Life Insurance Fine

Key Regulatory Violations

The fine was levied due to the following regulatory breaches:

  1. Outsourcing and Web Aggregators: SBI Life failed to provide clear details about service fees and scope of services in dealings with web aggregators like Policybazaar and Compare Policy. Payments to entities like Extent Marketing lacked proper justification, highlighting transparency issues.
  2. Death Claim Processing: SBI Life faced scrutiny for repudiating claims within three years of policy issuance without adequate evidence, violating Section 45 of the Insurance Act, 1938. While some claims were settled, inconsistencies in the process were noted.
  3. Selling Withdrawn Policies: In seven cases, policies were issued post-withdrawal, breaching regulations and causing consumer confusion.

Implications for Policyholders

These violations emphasize the importance of transparency and regulatory compliance in the insurance sector. As a policyholder, you should:

  • Stay Informed: Understand your rights and the terms of your policy.
  • Review Policy Documents: Ensure your insurer adheres to stated processes.
  • Seek Assistance: Reach out for expert help in case of disputes.

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