The Securities Appellate Tribunal (SAT) has pulled up SBI Life Insurance for delaying hearing of the matter related to refund of ₹275.29 crore to policy holders.
In March 2014, Insurance Regulatory and Development Authority of India (IRDAI) ordered SBI Life to refund ₹275.29 crore which, according to the regulator, was the quantum of excess commission collected from holders of Dhanaraksha Plus Limited Premium Paying Term policy.
In 2015, SAT had granted interim relief to SBI Life by directing IRDAI not to take any coercive action to recover ₹275 crore till the tribunal passed final orders in the matter.
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On Friday, the appellate body imposed costs of ₹10,000 on SBI Life for dragging the matter for more than two years after having received a reprieve in the form of a stay on the IRDAI order. The tribunal posted the matter to October 31 for hearing.
While the policy had two premium payment options — single premium and two-year premium paying plan — the regulator found that the corporate agents of SBI Life, that mostly included State Bank of India and its associate banks, did not reveal to the policy holders the availability of single premium option.
The share of commission was less in a single premium option when compared with the two-year premium plan.
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SBI Life Insurance is a 74:26 joint venture between State Bank of India (SBI) and BNP Paribas Cardif of France.
Senior advocate Janak Dwarkadas along with DMD Advocates appeared for SBI Life on Friday while IRDAI is being represented by Suvan Law Advisors along with senior counsel Kevic Setalwad.Meanwhile, the public issue of SBI Life Insurance, which closed on Friday, was subscribed 3.58 times till 8 pm with bids received for 31.55 crore shares as against 8.82 crore shares on offer, in the price band of ₹685 to ₹700.