This is based on the reply to Show Cause Notice dated 25, August / 01^st September, 2014, submissions made on 24.10.2014 and during Personal Hearing Chaired by             Mr. M. Ramaprasad, Member (Non-Life), IRDA, on 09^th April, 2015 at 11.30 Hrs. at the office of Insurance Regulatory and Development Authority, 3^rd Floor, Parishrama Bhavan, Basheerbagh, Hyderabad.

 

Notice to show cause on observed deficiencies in the functioning of the Insurer namely, Bajaj Allianz General Insurance Co. Ltd., was issued and in deference to the Insurer’s request to hear them on the charges for which they had also filed written submissions, the undersigned during the course of the personal hearing heard the submissions of the Insurance company represented by Mr. Tapan Singhel, Managing Director & CEO, Mr. Milind Choudhuri, CFO, Mr. Suresh Sugathan, Mr. Onkar Kothari, and Mr. Sasi Kumar Adidamu of M/s Bajaj Allianz General Insurance Co Ltd., and on behalf of the Authority, Mr. M. Ramaprasad, Member (Non-Life), Mrs. Yegna Priya Bharath, Joint Director (Health), Mr. N.M. Behera, Deputy Director (Health) and Mr. K. Rajasimha OSD (Health Products-2) were present in the personal hearing.

 

The submissions made by the Insurer in their written replies to the Notice to Show Cause issued by the Authority and also those made during the course of personal hearing were taken into account.

 

The findings on explanation offered by the Insurer Bajaj Allianz General Insurance Co., Ltd., to the issues raised in Notice to Show Cause and the decisions are as follows;

 

 

The Products named, (1)“Comprehensive Trip Protection-Domestic”, (2)”Comprehensive Trip Protection-International” (herein after called ‘said products’) were not approved by the Authority and declined vide letter dated 13-04-2010. Further, the Products were also filed on Certificate Basis which were declined by the IRDAI vide letter dated 26.02.2014.

 

However, the Company has marketed the said products and has continued to sell the same products, in spite of the declinature letter of the Authority.

 

Insurer has highlighted vide letter dated 24^th October 2014, that it did not breach the provision of the Insurance Regulatory and Development Authority guidelines on File & Use requirements for General Insurance Products.

 

The Insurer reiterated through different paragraphs vide its above referred letter that

 

The Company has filed the products on 11.11.2008 and the Company did not receive any queries in respect of the products from the Authority by 11.12.2008. Despite the provision 11 of F& U requirements dated 28.09.2006, the Company did not commence marketing of the products till 11.12.2008.

 

Though the Company has submitted responses two times to the queries of the Authority, the Company did not receive any communication for almost 20 months. The Insurer has highlighted the provision of paragraph 11 of the File & Use requirements.

 

With regard to the Authority’s letter dated 13.04.2010, the Insurer had claimed that they did not receive the Authority’s communication dated 13^th April 2010 and come to know about the declining of the products through the Authority’s letter 13^th April 210 only through the Authority’s letter of 23th May 2014.

 

The Company reiterated that they did not receive the letter dated 13^th April 2014 and there proceeded on the basis of the genuine belief that the product had received the deemed approval status as per File & Use Procedures. The Company also stated that had it received the rejection letter of 13^th April 2010, they would not have filed the compliance certificate on 25^th September, 2013 under the IRDA (Health Insurance) Regulations 2013. The Insurer also requested the Authority to share a copy of the said letter dated 13^th April 2010.

 

Observation on submissions made during personal hearing

 

The Insurer had informed that they have responded vide their letter dated 24^th October 2014 against the charges made by the Authority. In the meantime, the insurer submitted that

 

1)    They never received the relevant communication form the Authority which rejected the products filed.

2)    Under exceptional circumstances and interpretation of the relevant regulations, the Insurer considered the products to be deemed approved.

3)    The Insurer waited for considerable period of time before launching the products in the market.

4)    The marketing of the products was stopped on receiving the relevant communication from the Authority dated 24^th February 2014.

5)    The Insurer has since strengthened the communication systems in respect of regulatory compliances and correspondence.

6)    One-off event, i.e., never in the past nor after the said date, any communication of the Authority remained without receipt.

7)    The Insurer requested that it may be allowed to re-file the same under the HIR 2013.

 

Considering the foregoing, it is our most humble & earnest request ot the Authority to drop the proceedings against us and close the matter.