LIC, HDFC Standard fined for missing FY09 rural target
20 Aug 2010
The Insurance Regulatory and Development Authority (IRDA) has imposed a fine of Rs5lakh each on Life Insurance Corporation (LIC) and HDFC Standard Life Insurance, for failing to meet rural and social sector obligation in 2008-09.
Finance minister Pranab Mukherjee told the Lok Sabha today that the penalty imposed on LIC and HDFC Standard Life was for failing to fully comply with the rural sector target for the financial year 2008-09,
State-run LIC managed to underwrite 24.27 per cent of policies in the rural sector against the target of 25 per cent while HDFC Standard Life managed to meet 12.85 per cent against the 19 per cent target, the finance minister said.
The Insurance Regulatory and Development Authority (Obligation of Insurers to Rural or Social Sectors) Regulations, 2002 as amended in 2007, obliges insurance companies to achieve prescribed percentage of policies in the case of life insurance and premium income in the case of non-life insurance in the rural sector.
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