The Insurance Regulatory and Development Authority of India (Irdai) had received a complaint dated on October 7, 2016 and October 10, 2016, alleging that Policybazaar had floated an offer, titled 'Navratra Offer', under which certain monetary incentives in the guise of complementary benefits were being offered to prospective customers.
Insurance regulator Irdai has imposed a penalty of Rs 1.11 crore on Policybazaar, an online insurance aggregator, for failing to comply with regulations governing insurance web aggregators. Irdai has also issued warning for violations of regulations.
The Insurance Regulatory and Development Authority of India (Irdai) had received a complaint dated on October 7, 2016 and October 10, 2016, alleging that Policybazaar had floated an offer, titled ‘Navratra Offer’, under which certain monetary incentives in the guise of complementary benefits were being offered to prospective customers. The incentives included complementary wellness benefits for all new eligible customers and included coverage of 5 OPD consultations, unlimited telemedicine consultations, unlimited second opinion services, HYJIYA Digital Wellness Platform and pharmacy discounts.
Watch Video: How To File ITR-1 for AY 2019-20 in less than 15 minutes
Policybazaar had entered into an agreement with Indian Health Organization by Aetna, or IHO, which is not an insurer. “It was also observed that Policybazaar did not disclose to the authority of engaging the services of unregistered third party entity IHO. Policybazaar offered prospects incentives/benefits offered by IHO, an unregistered third party entity, and thereby violated Regulation 3(aXiii) of IRDA (Web Aggregators) Regulations, 2013,” said Irdai in its order.
According to the insurance regulator, it was observed that Policybazaar had displayed the services offered by IHO on its website and therefore violated regulation. As per regulations, the web aggregator shall not display any advertisement pertaining to any product or service of other products. Policybazaar insurance web aggregator is the largest web aggregator in the country.
Irdai also noticed that the web aggregator has been issuing advertisements on various TV channels offering up to 60% off on motor insurance for two- & four-wheelers. The said advertisements were found to be misleading because in the video part they were displaying/ advertising the text “up to 60% off on two-wheeler insurance and up to 60% off on car insurance provided by insurers”, while in the audio part, the company was stating “60% off on two-wheelers and 60% off on car insurance”, which was not in compliance with Regulations of IRDA (lnsurance Advertisements and Disclosure) Regulations, 2000.