Apollo Munich Health Insurance Company Limited has been imposed penalty of Rs 20 Lakh on various charges by Insurance Regulatory and Development Authority of India (IRDA), a statutory body which regulates and monitor insurance sectors in India.
In the first charge, Apollo Munich has accepted premium of Rs 51.21 Lakh from agents after expiry of their license. Solicitation of insurance business after expiry of license is a serious violation and looking at the seriousness of the violation, IRDA imposes a penalty of Rs 5 lakh for violation of the provisions of Insurance Act, 1938 and Authority guidelines.
In another case, Apollo Munich entered into an agreement with Makemytrip.com to market its travel insurance products through Makemytrip (MMT) web site and for other support services.
Makemytrip is remitting the premium collected through its website on a periodical basis to Apollo Munich. Makemytrip is not a licensed insurance intermediary to solicit and procure insurance business. The invoices raised by Makemytrip.com in this regard only show it as advertisement expenses and there is no specific quotation or agreement for these payments.
On the basis of the documents on record, IRDA observed that Apollo Munich has accepted risks prior to receipt of premium from Makemytrip. It was further observed that the premium dues from Makemytrip for the risks accepted were in the range of Rs 16 to 41 lakh per month during 2009-10.
Acceptance of risk prior to receipt of premium amounts to violation of section 64VB of Insurance Act, 1938. It is further noted from that Apollo Munich has collected advance deposit premium of Rs 25 lakh from MMT only after the inspection observation i.e. on 28/01/2011. It is pertinent to note that agreement with MMT was entered into on 30th April, 2008.
IRDA in exercise of the powers vested in Section 102 (b) of the Insurance Act, 1938 imposes a penalty of Rs.5 lakh for each year of violation from FY 2008-09 to 2010-11 (total Rs.15 lakh) on Apollo Munich Health Insurance Company Limited.
IRDA directed Apollo Munich to remit the total penalty amount of Rs.20 lakh (Rupees Twenty Lakh only) to Insurance Regulatory and Development Authority of India (IRDA) within a period of 15 days from the date of receipt of this Order
IRDA also asked Apollo Munich to confirm compliance in respect of all the directions referred in the Order, within 21 days from the date of issuance of the order.