IRDAI Fines Canara HSBC Life ₹1 Crore For Mis-Selling Policy To 88-Year-Old

The Insurance Regulatory and Development Authority of India (IRDAI) has fined Canara HSBC Life Insurance Company Limited Rs 1 crore for improperly selling a life insurance policy to an 88-year-old customer. The regulator found multiple issues with the sale of the deferred annuity policy, such as suitability, solicitation, disclosures, and internal controls.

IRDAI's investigation began after they heard about the sale through a social media post. The policy, which had an annual premium of Rs 2 lakh payable for four years, was sold through Canara Bank, the insurer's corporate agent. The customer's daughter was designated as the annuitant. IRDAI discovered that the policy's terms only applied to customers aged 30 to 80, but the customer was 88 years old when the policy was sold.

The regulatory body also noted that the insurer did not adequately assess the customer's financial situation or the appropriateness of the policy, particularly given his age and the substantial premium. Additional shortcomings in the sales process included verification call deficiencies, proposal form errors, and inadequate disclosure of key policy features.

The benefit illustration did not have a verifiable acknowledgment from the policyholder, and the Customer Information Sheet and proposal form were not provided to the customer when they sold the policy. IRDAI also pointed out that the premium was collected before the policy was issued and that the consequences of the proposer's death during the premium-paying period were not adequately explained.