Insurance regulator IRDAI has imposed penalties totalling ₹9 lakh on United India Insurance Co. Ltd. (UIIC) after it found the general insurer had violated certain provisions. A sum of ₹5 lakh is for violation of regulations that stipulate certain timelines such as those relating to assigning of surveyors ; for the surveyor to submit his report; the insurer offering a settlement of claim to the insured as well as paying the claim to the insured. The action against the State-owned insurance company followed a show cause notice that the regulator issued in August 2018 in connection with an onsite inspection during October 2015. The UIIC had responded to the show cause notice in October 2018 and made further submissions during a personal hearing in December. The IRDAI order said an examination of the sample documents pertaining to the insurer revealed that there are numerous circumstances where the surveyor has been appointed beyond 72 hours.

In 28 claims, the submission of survey report has been delayed beyond six months; and in 33 claims there has been a delay in settlement of claim by the insurer after the receipt of final surveyor report, the order said, directing the company to pay ₹5 lakh.

IRDAI had found three violations by the company, of which for two it decided to impose penalty on the company. The balance ₹4 lakh – ₹1 lakh each is for violations pertaining to four sample policies – was imposed on UIIC for violation of circular and guidelines on rates/discounts an insurer can offer and disclosure of material information.

On examining the sample policy files of UIIC, the order said, “the insurer has not recorded justification for the “extent of discount” given to different clients. The discount given is derived from market forces, as the insurer relies on quotes given by other competitors.”

The regulator said if UIIC “feels aggrieved by the order, it may prefer an appeal to the Securities Appellate Tribunal.