The Insurance Regulatory and Development Authority (IRDA) has imposed a fine of Rs 70,00,000 on SBI Life Insurance company for paying around Rs.204 crore to eight of its corporate agents and six master policyholders, far in excess of the stipulated levels

SBI Life Insurance is a 74:26 joint venture between State Bank of India (SBI) and BNP Paribas Cardiff.

According to IRDA, payments were made by SBI Life in violation of laid down guidelines.

The company argued that the payments were reimbursement of administrative expenses incurred by master policyholders. But IRDA termed it as untenable.

IRDA had issued Group Insurance Guidelines under Section 34 of the Insurance Act stipulating the maximum percentage of commission payable to an agent in respect of group insurance policies.

Further, it had said, no payment will be made towards management expenses, document expenses, profit commission, bulk discount or payment of any other description to the agent or group organizer or manager or a master policyholder.

The payments were received from SBI Life Insurance by the agents and master policyholders between 2005-2010.

The eight corporate agents (associates of State Bank of India) and the six master policyholders are:

State Bank of India

State Bank of Bikaner and Jaipur

State Bank of Hyderabad

State Bank of Indore

State Bank of Mysore

State Bank of Patiala

State Bank of Saurashtra

State Bank of Travancore

Master Policyholders:

Union Bank of India

United Bank of India

Sundaram Home Finance

Dewan Housing Finance

The Federal Bank

Kerala Transport Development Finance Corporation