IRDAI Imposes Rs 1.11 Crore Penalty on PolicyBazaar
The insurance regulator has imposed a Rs 1.11 crore penalty on web aggregator Policybazaar for violation of regulations. Insurance Regulatory and Development Authority of India (IRDAI) said Policybazaar entered into a partnership with a non-insurance entity called ‘Indian Health Organization by Aetna’ (IHO) and offered incentives to its customers in violation of regulations.
Policybazaar entered into a partnership with ‘lndian Health Organization by Aetna’ and offered incentives to its customers in violation of regulations
IRDAI said incentives included complimentary wellness benefits for all new eligible customers and covered five OPD consultations, unlimited telemedicine consultations, unlimited second opinion services, as well as pharmacy discounts.
Further, the web aggregator also displayed the services offered by IHO on its website. This is a violation of regulations as these entities are not allowed to advertise products and services of other entities.
Policybazaar was also advertising on television that they would offer a 60 percent discount on the motor insurance policy, which IRDAI said leads towards promoting the products of particular insurers. However, the company clarified that they have removed the advertisement after concerns expressed by the regulator.
“As the leader in the online web aggregation space, Policybazaar is a web aggregator which other web aggregators and online distributors seek to become. This places tremendous responsibility on Policybazaar. In light of such expectations, Policybazaar was expected to act diligently and with utmost care and responsibility. Unfortunately, Policybazaar failed in complying with the Regulations,” said IRDAI.
Policybazaar will be free to file an appeal with the Securities Appellate Tribunal against this order.