New Delhi: The Insurance Regulatory and Development Authority of India (IRDAI) has imposed a ₹1 crore penalty on Canara HSBC Life Insurance Company over the alleged mis-selling of a life insurance policy to an 88-year-old customer.
The regulator identified lapses involving product suitability, solicitation, disclosures and internal controls while examining the sale of a deferred annuity policy.
Social Media Post Triggers Probe
IRDAI initiated proceedings after taking suo motu cognisance of a social media post highlighting the policy sale.
The policy required an annual premium of ₹2 lakh for four years and was sold through Canara Bank, which acted as the insurer’s corporate agent. The customer’s daughter was named as the annuitant.
IRDAI found that the approved product allowed entry only for customers aged between 30 and 80 years. However, the proposer was 88 when the policy was sold.
Suitability Assessment Questioned
The regulator said the insurer failed to adequately assess the customer’s financial circumstances and whether the product was suitable, particularly considering his age and premium commitment.
IRDAI also identified shortcomings in the verification call, proposal form and disclosure of important policy features.
The benefit illustration lacked a verifiable acknowledgement from the policyholder. The Customer Information Sheet and proposal form were also not provided at the time of sale.
The regulator further observed that the premium was collected before issuance of the policy.
It said the consequences of the proposer’s death during the premium-paying period were not adequately explained to the customer.
Public Insurance Registry Proposed
Separately, IRDAI has proposed setting up a Public Insurance Registry (PIR) as digital public infrastructure for the insurance sector.
The proposed registry is aimed at creating a more connected and transparent insurance ecosystem.
According to IRDAI, the registry could reduce information gaps and increase competition among insurers and other market participants.
The regulator expects this to encourage product innovation, competitive pricing, improved services and a better overall experience for insurance customers.
