The IRDAI has imposed a penalty of Rs. 2.18 crore on Hero Insurance Broking India (HIBIL) as it failed to comply with the Motor Insurance Service Provider (MISP) guidelines.
The Insurance Regulatory and Development Authority of India (Irdai) has imposed a penalty of Rs. 2.18 crore on Hero Insurance Broking India (HIBIL) as it failed to comply with the Motor Insurance Service Provider (MISP) guidelines. In its order, the insurance regulator also said insurance intermediaries have created a panel of insurers which is in violation of the guidelines on the MISP.
“Authority circular of January 11, 2018 reiterated that with the commission/remuneration levels for the insurance intermediaries and MISP being stipulated, the creation of a panel of insurers is restrictive, which can lead to undesirable market practices. Therefore, to remove misgivings in the minds of the stakeholders, the authority clarified that neither the insurance broker nor the MISP can create such a panel of insurer for selling motor insurance policies,” the Irdai order said. HIBIL admitted to creating a panel of four general insurers out of a total of 25 general insurers and have violated MISP guidelines.
The Irdai also received complaints from some general insurance agents associations regarding the apparent conflict of interest in the role of MISP in selling insurance policies and servicing and repairing motor vehicles under the insurance policies sold by it, high claims ratio under the MISP channel, extra payments made to MISP by insurers and disparity of treatment to agents, etc.
Hero Insurance Brokers is one of the biggest insurance brokers covering two-wheelers in the country. “It carries in its name the name of being one of the largest 2-wheeler manufacturers in the country. Therefore, as one of the top brokers in the two-wheeler insurance broking segment, HIBIL is a leader in its field. This places tremendous responsibility on HIBIL as it is held as the torch bearer of the broking profession. In light of such expectations, HIBIL was expected to act diligently and with utmost care and responsibility. Unfortunately, HIBIL failed in complying with the MISP guidelines which had been created to protect the interest of policyholders and other stakeholders,” said the Irdai order.