IRDAI – Penalty of Rs.1 Crore – Go Digit General Insurance Co Ltd – Order dated 2.5.2024 – Violation of Section 26 of the Insurance Act, 1938 read with IRDAI Regulations 2024
On 20.9.2017, IRDAI granted Registration Certificate to the Go Digit General Insurance Ltd, (JV Agreement) to carry general insurance business in India on various conditions including the condition that the Insurer shall be a public company and no change in the structure or composition of the company or changes in the share holding pattern of the promoters shall be without prior permission of the Authority.
The JV Agreement was amended on 11.8.2022. As per the information given by the Insurer to SEBI, it was that there was change in conversion ratio.
It was found that the Insurer failed to submit full particulars of alteration in the JV agreement until 17.7.2023 and therefore, violated Section 26 of the Insurance Act, 1938.
After giving show cause notice and personal hearing, it was found that there was inordinate delay in filing particulars and the material changes will lead to change in shareholding. It was, therefore, held that the insurer failed to comply with Section 26 of the Act and penalty of Rs.1 crore was imposed under Section 102 of the Act. It was directed to charge said penalty to its share holders account.
Section 26 of the Insurance Act provides that the alterations in the particulars furnished with the registration application shall be reported
