₹1cr penalty on life insurer for mis-selling annuity
In a case of mis-selling, India's Insurance Regulatory and Development Authority (IRDAI) has imposed a Rs 1 crore penalty on Canara HSBC Life Insurance Company Ltd. The regulator found multiple lapses in the sale, underwriting, issuance, and disclosure of a deferred annuity policy to an 88-year-old customer, Mr. Iyer. Despite the policy brochure indicating an entry age of 30 to 80 years, Canara HSBC Life sold the policy to Mr. Iyer, making him a proposer instead of an annuitant.
The policy, Canara HSBC Life Insurance Smart Guaranteed Pension VI, had an annual premium of Rs 2 lakh, a premium-paying term of four years, and a deferment period of four years. The policy was issued in February 2025, with the annuity scheduled to commence thereafter. The regulator criticized the insurer for various issues, including the lack of documentary verification of the customer's financial capacity, misrepresentation during a pre-issuance verification call, discrepancies in proposal documents, and improper collection of the premium before policy issuance.
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