The insurance regulator has imposed a Rs
1.11 crore penalty on web aggregator Policybazaar for violation of regulations.
Insurance Regulatory and Development Authority of India (IRDAI) said
Policybazaar entered into a partnership with a non-insurance entity called
'Indian Health Organization by Aetna' (IHO) and offered incentives to its
customers in violation of regulations.
"IRDAI Imposes Rs 1.11 Crore Penalty on PolicyBazaar"
IRDAI said incentives included
complimentary wellness benefits for all new eligible customers and covered five
OPD consultations, unlimited telemedicine consultations, unlimited second
opinion services, as well as pharmacy discounts.
Further, the web aggregator also displayed
the services offered by IHO on its website. This is a violation of regulations
as these entities are not allowed to advertise products and services of other
entities.
"Policybazaar entered into a partnership with ‘lndian Health Organization by Aetna’ and offered incentives to its customers in violation of regulations"
Policybazaar was also advertising on
television that they would offer a 60 percent discount on the motor insurance
policy, which IRDAI said leads towards promoting the products of particular
insurers. However, the company clarified that they have removed the
advertisement after concerns expressed by the regulator.
"As the leader in the online web
aggregation space, Policybazaar is a web aggregator which other web aggregators
and online distributors seek to become. This places tremendous responsibility
on Policybazaar. In light of such expectations, Policybazaar was expected to
act diligently and with utmost care and responsibility. Unfortunately, Policybazaar
failed in complying with the Regulations," said IRDAI.
Policybazaar will be free to file an appeal
with the Securities Appellate Tribunal against this order.
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