INDIA – SKS Microfinance pays penalty to insurance watchdog IRDA

SKS Microfinance said it has paid Rs. 50 lakh as penalty imposed by insurance regulator-Insurance Regulatory and Development Authority (IRDA), along with a request to file a review petition to drop the charge made against the company.

“The company has paid Rs. 50 lakh to IRDA with a request to permit it to file a review petition to drop the said charge,” SKS said in a filing to bourses.

The insurance watchdog last month imposed Rs. 50 lakh penalty on SKS Microfinance, which had collected extra funds, apart from the premium, as a corporate insurance agent without proper disclosure to policyholders.

As per the IRDA order, a microfinance institution (MFI), which also operates as a corporate insurance agent, cannot collect more than the premium amount charged for the policy on behalf of an insurance company.

It held the company, which acted as a corporate agent of Bajaj Allianz Life Insurance Company, guilty on that score and charged a penalty.

Meanwhile, the company in a separate statement said that it has appointed Ranjana Kumar, former vigilance commissioner with Central Vigilance Commission, as an independent director on its board.