Life insurance scam: ICICI Prudential reimbursed Rs 2.9 crore, LI sold as fixed deposit in 1 case, government says

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Life insurance scam: The central government informed Parliament on Tuesday March 23, 2021 that the Insurance Regulatory and Development Authority of India (IRDAI) had reported receiving 316 complaints from 250 policyholders in the past seven years, alleging abuse of insurance. produced by certain vendors of ICICI Bank and ICICI Prudential Life Insurance Company.

The Reserve Bank of India (RBI) also reported receiving a complaint alleging the issue of an insurance policy in place of fixed deposit, said Union Minister of State for Finance Anurag Thakur, in a written response to a question from Rajya Sabha.

Thakur’s response came in response to a question about “whether the government is aware of the fraud complaints against ICICI Bank and ICICI Prudential for issuing life insurance policies to poor farmers under the guise of fixed deposits.”

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Taken measures

In response to another question about the actions taken by the Finance Ministry and the RBI against ICICI Bank and ICICI Prudential in response to the fraud, Thakur said IRDAI informed that the complaints have been taken and that the ICICI Prudential Life Insurance Company had reported the resolution of all 316 complaints. The insurance company reimbursed an amount of Rs 2,93,62,385 in 254 cases and refused reimbursement in 23 cases. Other steps taken by the insurance company to resolve the complaints also included product switching in the remaining cases, Thakur said.

In the case of the sale of a fixed deposit instead of an insurance policy, the Minister said: “RBI reported about the complaint received that the premium amount of Rs 2,00,000 / – received of the client was reimbursed by the ICICI Prudential Life Insurance Company. “

Regulatory guidelines to prevent the abuse of insurance products

Thakur said the RBI has advised that regulatory guidelines are in place to prevent banks from falsely selling insurance products.

“Paragraph 18 (d (of RBI’s Master Directions – Reserve Bank of India (Financial Services provided by Banks) Directions, 2016, dated August 26, 2016, set out the conditions that banks must meet when starting a corporate agency. insurance at the departmental level, ”Thakur said.

“These conditions stipulate, among other things, that there must be a standardized system for assessing the need and suitability of products for a customer, the prevention of restrictive practices and a solid internal mechanism for recourse in the event of a complaint, with a client remuneration policy approved by the Council to resolve problems related to the services offered, ”added the Minister.

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