Regulator IRDAI has imposed a penalty of Rs 30 lakh on SBI General Insurance Company for its failure to comply with the third-party motor insurance regulations.
The SBI General Insurance Company had failed to meet the minimum obligations under Motor Third Party business as specified in concerned IRDAI Regulations for 2018-19, the insurance regulator said in its order.
The regulator said the charge was that the insurer did not comply with the MTP obligation for the fiscal year 2018-19. During 2018-19, SBI General Insurance Company had underwritten Rs 316.36 crore as against the minimum obligatory MTP insurance business of Rs 638.34 crore resulting in a shortfall of Rs 321.98 crore. In percentage terms, the shortfall worked out to be around 50.44 per cent of MTP insurance obligation.
The order further said that the insurer stated that they have never refused any MTP policy at any of its place of business during 2018-19 and there was no malafide intention on their part.
IRDAI noted that for the financial year 2018-19, the company did not fulfill the obligation and had a shortfall of Rs 321.98 crore, which amounts to non-compliance of regulation of IRDAI (Obligation of Insurer in respect of Motor Third Party Insurance Business) Regulations, 2015.
It also said the insurer had not fulfilled the MTP obligations during the immediate previous two financial years also.
"Taking into consideration the repetitive nature of the violation, magnitude of violation, the submissions of the insurer and that they have fulfilled and marginally exceeded their obligations for FY 2019-20 and 2020-21, the Authority...hereby imposes a penalty of Rs 30,00,000," the order said.
The regulator has also advised the company to ensure strict compliance in the future of the obligations under Motor Third Party business.