₹15 lakh penalty imposed on Bharti AXA General Insurance by Irdai1 min read . Updated: 01 Jan 2021, 10:41 PM IST
- The insurance regulator has imposed a penalty of ₹10 lakh on the private sector insurance company for non-compliance with minimum obligations under regulations concerning third-party motor insurance business
Insurance Regulatory and Development Authority (Irdai) has imposed a total penalty of ₹15 lakh on Bharti AXA General Insurance Company in two different cases for violation of various provisions concerning motor insurance.
The insurance regulator has imposed a penalty of ₹10 lakh on the private sector insurance company for non-compliance with minimum obligations under regulations concerning third-party motor insurance business.
During 2017-18, Bharti AXA General Insurance Company allegedly underwrote ₹380 crore as against the minimum obligatory motor third-party insurance business of ₹399.94 crore, resulting in a shortfall of ₹19.94 crore.
A penalty of ₹1 crore recommended due to the repetitive nature of non-compliance by the private sector insurer by the officer. The Irdai, however, reduced the penalty to ₹10 lakh.
In another case, the Irdai has slapped a fine of ₹5 lakh on the private insurer for violation of the guidelines which prohibit payments, directly or indirectly, to the motor insurance service provider or any of its associate company.
In November, 2020, ICICI Lombard General Insurance received in-principle approval to acquire Bharti AXA General Insurance. "Upon closing of the proposed transaction, the consolidated entity will have a market share of 8.7% on proforma basis in the non-life business," ICICI Lombard said in a statement. The policyholders should benefit from an enhanced product suite and deeper customer connect touch points, said India’s largest private non-life insurer.
As a part of the deal, shareholders of the demerged company i.e. Bharti and AXA will be allotted equity shares of the combined entity of ₹10 each with Bharti shareholders receiving 18.23 million shares and AXA receiving 17.52 million shares. At present, Bharti Enterprises owns 51% in Bharti AXA General, while its France-based JV partner AXA has 49%.
Based on the share exchange ratio recommended by independent valuers, shareholders of Bharti AXA will receive two shares of ICICI Lombard for every 115 shares of Bharti AXA. ICICI Lombard is a listed insurance firm, and Bharti and AXA will be public shareholders in the combined entity after the deal. The proposed merged non-life insurance company is expected to earn a total annual premium of at least ₹16,447 crore on a combined basis with market share of around 8.7%, said the two companies in a joint media release.