IRDAI member caught in corruption allegation

The Securities Appellate Tribunal has criticised a member of regulator Insurance Regulatory and Development Authority of India (IRDAI) for making a “false statement” in an order, saying it “virtually amounts to aiding and abetting corruption in the insurance business.”

The tribunal also directed the regulator to entrust the matter to a “competent officer” other than IRDAI member (non-life) P.J Joseph and pass a fresh order.

The latest ruling has come on a plea filed by UK-based Atkins Special Risks Ltd against an order passed in the case of Jagson International Ltd, according to a report in the Economic Times.

Atkins is into broking special risk insurance and re-insurance with core competence in marine and energy insurance. It provided international re-insurance cover to Jagson during the period 2002-2012 for an yearly commission.

From 2010 onwards, Jagson chairman Jagdish Gupta’s demand for a cut from the commission was rejected by Atkins, according to details mentioned in the SAT order. Later in 2012, the company’s re-insurance business was transferred to Marsh India Insurance Brokers Pvt Ltd.

Suspecting that illegal means were adopted by Gupta in transferring the business, Atkins moved the IRDAI in August 2015. As no action was taken, a writ petition was filed in September 2017 before the Telangana and Andhra Pradesh High Court which directed the insurance regulator to consider the complaint.

However, Joseph passed an order in January this year wherein the complaint was dismissed, saying that no documentary proof or material information was submitted. In its order passed on March 16, the tribunal said perusal of the complaint clearly shows that Atkins had relied on documentary evidence.