Insurance regulator IRDA has imposed a penalty of Rs 5 lakh each on two life insurers, state-run Life Insurance Corporation (LIC) and HDFC Life Insurance, for failing to meet rural and social sector obligation in 2008-09, Parliament was informed.
The Insurance Regulatory and Development Authority (IRDA) has imposed a fine on LIC and HDFC Standard Life Insurance for non-compliance under the rural sector target during 2008-09, Finance Minister Pranab Mukherjee told the Lok Sabha.
Against the target of 25 per cent, LIC missed it by a whisker and could only underwrite 24.27 per cent of policies in the rural sector, he said. At the same time, HDFC Standard Life achieved just 12.85 per cent against the target of 19 per cent, he said.
“As per the Insurance Regulatory and Development Authority (Obligation of Insurers to Rural or Social Sectors) Regulations, 2002 as amended in 2007 the insurance companies are required to achieve the prescribed percentage of their policies in case of life insurers and of premium income in case of non-life insurers in the rural sector in the respective year of their operations in India,” he said.