The Insurance Regulatory and Development Authority (IRDAI) has warned Sahara India Life Insurance Co for non-compliance of ‘expenses of management’ (EoM) norms and asked it to bring the expenditure levels within the limits by the end of 2016-17.
Owing to the fact that non-compliance with the EoM limits has occurred for the first time in the ten years of its operations and considering the submissions of the insurer as regards to steps being taken to improve upon the business…the insurer is hereby warned of the contravention with the provisions…and advised to bring the expenditure levels within the prescribed limits under Rule 17D of the Insurance Rules, 1939 by the end of financial year 2016-17, insurance regulator IRDAI said in an order.
On review of EoM statements submitted by the insurer for 2014-15, IRDAI observed that the company was non-complaint with EoM limits.
The regulator further warned the company that any future occurrence of this nature resulting in non-compliance of the provisions of the Insurance Act, rules and regulations will be viewed seriously and visited with appropriate action by the Authority.
The Insurance Regulatory and Development Authority of India also asked the insurer to bring the warning letter to the notice of its board in the next meeting.
In its submission, the insurer said the allowable expenditure were “exceeded unintentionally” and business was dependent on single premium products.
The insurer had requested IRDAI to “condone the non-compliance” in the financial year 2014-15.