Insurance broker running RenewBuy.com fined Rs 1 crore by IRDAI. Here’s why

The Insurance coverage Regulatory and Growth Authority of India (IRDAI) has imposed a penalty of Rs 1 crore on D2C Insurance coverage Broking Pvt Ltd for appointing brokers and canvassers to usher in the insurance coverage enterprise. The insurance coverage dealer was additionally discovered responsible of getting an internet site (renewbuy.com) with a special identify and was warned for a similar.

The insurance coverage dealer was accused of utilizing the model identify “renewbuy” for soliciting insurance coverage on-line with out “visibly and clearly displaying the Dealer’s identify on the web site.” The regulator discovered this to be violating Para 1 of Schedule VII beneath Regulation 22 of IRDA (Insurance coverage Brokers Rules,) 2013. As per this regulation, an internet site developed by an insurance coverage dealer ought to carry its identify as licensed by the authority. The utilization of every other identify of linkage to a different web site is prohibited.

Case historical past

The IRDAI had performed an on-site inspection of the dealer from 22-03-2017 to 24-03-2017 and sought a reply on its discovering from the dealer on 20-11-2017. The reply was obtained on 28-12-2017. The regulator issued a show-cause discover on 18-10-2019. The dealer replied to the discover on 10-11-2019.

IRDAI listening to and resolution

The dealer submitted that its identify, license quantity, the identify of the principal officer and the licence certificates have been made out there beneath the “About Us” part of the RenewBuy.Com web site. It additionally claimed to have knowledgeable the regulator concerning the area identify of their web site as “renewbuy.com” via a letter dated 23-12-2014.

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The IRDAI in its resolution mentioned that the “Dealer was utilizing an internet site carrying the identify “renewbuy” for soliciting insurance coverage enterprise with out visibly and clearly displaying Dealer’s identify on the mentioned web site.” Nevertheless, the dealer couldn’t submit any communication from the regulator which exempted it from complying with the regulatory provision. Additionally on the supply of related particulars on the “About Us” web page of renewbuy.com, the regulator mentioned the identical was not seen from the homepage of the web site throughout the inspection.

“The above signifies that the dealer has knowingly didn’t adjust to the regulatory requirement and the Dealer is warned for a similar,” IRDAI mentioned in its resolution dated twenty ninth June 2021.

Rs 1 crore advantageous

The IRDAI discovered that the insurance coverage dealer had “both engaged their promotor firm M/S D2C Consulting Pvt Ltd. who used their very own workers for canvassing insurance coverage for the Dealer or engaged different entities e.g. BizConnect, Bersavi India Pvt. Ltd. and so forth. (via their promoter firm) who employed canvassers/brokers utilizing a mobile app viz. renewbuy companions.”

Nevertheless, the regulator mentioned in its order that the dealer employed brokers or canvassers to usher in enterprise in collusion with the promoter firm M/S D2C Consulting Pvt Ltd. The dealer additionally acknowledged throughout the private listening to that it had engaged varied unlicensed people and entities via M/S D2C Consulting Pvt. Ltd. for bringing enterprise and soliciting insurance coverage enterprise.

As per the IRDAI resolution, the dealer was responsible of violating Para 3(b) of Schedule VI-A beneath Regulation 28 of IRDA (Insurance coverage Brokers) Rules 2013 from the 12 months 2015-16 until the date of inspection. This regulation mandates that “Each insurance coverage Dealer shall verify that he doesn’t make use of brokers or canvassers to usher in enterprise.”

The authority imposed a penalty of Rs 1 crore on the dealer for violation of Schedule VI-A beneath Regulation 28 of IRDA (Insurance coverage Brokers) Rules 2013.

The IRDAI additionally warned the insurance coverage dealer for not having two certified individuals to solicit the insurance coverage enterprise.

IRDAI has allowed the dealer to attraction to Securities Appellate Tribunal if it feels “aggrieved by any of the choices on this order.”