IRDAI reminds SBI Life Insurance to refund policyholders

SBI Life Insurance Company, once again, has been asked to refund policyholders, the excess commission the company paid banks for selling life covers to home buyers.
 
In 2012, the Insurance Regulatory and Development Authority of India (IRDAI) had found SBI Life Insurance guilty of violating its rule of paying commission on single-premium policies. IRDAI said that between November 2017 and August 2010, SBI Life Insurance overpaid the master policyholders like banks and housing finance companies. 

The authority also alleged that the insurance company paid a commission of 20 per cent as against 2 per cent commission payable of single-premium plans. The difference was at Rs 84 crore at that time. More than 90 per cent commission was paid to SBI and its associated banks.
 
However, the policyholders are unlikely to get the refund soon. In 2015, the amendment of the insurance laws provided for the securities appellate tribunal (SAT) as the appellate authority for those aggrieved by IRDAI orders. Since the order by IRDAI is a fresh judgment, SBI Life Insurance would have the freedom to again appeal to the SAT.