IRDAI fines bank ₹1 cr over insurance grievances
The Insurance Regulatory and Development Authority of India (IRDAI) has fined IndusInd Bank ₹1 crore for inadequate insurance-related grievance redressal mechanisms. During a recent inspection, IRDAI discovered that IndusInd Bank, acting as a corporate agent, lacked a dedicated system for insurance policyholders to lodge complaints. The bank's complaint channels were primarily designed for banking customers and did not clearly outline an insurance-specific framework for raising and escalating grievances.
Furthermore, the regulator found that IndusInd Bank's toll-free number and IVR system did not offer an option for policyholders to lodge insurance-related grievances. The website also lacked clear disclosure of the bank's role as a corporate agent, stating that it did not underwrite insurance risk or act as the insurer.
Nevertheless, IRDAI did not impose a penalty for other compliance issues, such as renewal notices lacking all required information and improper website disclosures. Instead, the regulator cautioned the bank to strengthen its grievance redressal mechanism. This includes ensuring that every insurance complaint lodged by a policyholder generates an acknowledgement number for tracking progress and escalation.
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