IRDAI has imposed a monetary penalty of Rs. 30 lakh on SBI General Insurance Company for its failure to comply with the third-party motor insurance regulations. The company had failed to meet the minimum obligations under Motor Third Party (MTP) business as specified in concerned IRDAI Regulations for 2018-19.
IRDAI stated the charge was that the insurer did not comply with the MTP obligation for the fiscal year 2018-19. During 2018-19, SBI General 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% 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.
The regulator noted that for the financial year 2018-19, SBI General 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.
The order stated, “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.”