SKS Microfinance pays penalty to insurance regulator IRDAhttps://indianexpress.com/article/news-archive/web/sks-microfinance-pays-penalty-to-insurance-regulator-irda/

SKS Microfinance pays penalty to insurance regulator IRDA

MFI had collected extra funds without proper disclosure to policy-holders.

SKS Microfinance said it has paid Rs 50 lakh as penalty imposed by insurance regulator IRDA along with a request to file a review petition to drop the charge made against the company.

“The company has paid Rs 50 lakh to IRDA with a request to permit it to file a review petition to drop the said charge,” SKS said in a filing to bourses.

The insurance watchdog last month imposed Rs 50 lakh penalty on the SKS Microfinance which had collected extra funds,apart from the premium,as a corporate insurance agent without proper disclosure to policy-holders.

As per the Insurance Regulatory and Development Authority (IRDA) order,a microfinance institution (MFI),which also operates as a corporate insurance agent,cannot collect more than the premium amount charged for the policy on behalf of an insurance company.

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It held the company which acted as a corporate agent of Bajaj Allianz Life Insurance Company,guilty on that score and charged a penalty.

Meanwhile,the company in a separate statement said that it has appointed Ranjana Kumar,former vigilance commissioner with Central Vigilance Commission,as an Independent Director on its Board.

The company’s shares closed today at Rs 140,down 2.32 per cent on the BSE.

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