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SAT to decide on Rs 275 cr refund to policy holders: SBI
The Securities Appellate Tribunal (SAT) has to decide on the refund of around Rs 275 crore to policy holders, a senior official of SBI Life Insurance Co said.
“The case is pending in SAT. We have no say on it now,” SBI Life Insurance President M Anand said. It has been more than two years since the Insurance Regulatory and Development Authority of India (IRDAI) ordered SBI Life Insurance to refund Rs 275.29 crore collected in excess commission to holders of Dhanaraksha-Plus Limited Premium Paying Term policy.
In March 2014, IRDAI ordered SBI Life to refund Rs 275.29 crore excess commission collected to holders of Dhanaraksha-Plus Limited Premium Paying Term policy.
In Feb 2015, IRDAI chairman TS Vijayan again directed SBI Life to implement its March 2014 order. SBI Life’s policy in question has two premium payment options -- single-premium and twoyear premium paying plan. In the case of single-premium policy, the premium for the entire policy period is collected upfront.
The commission paid on that cannot be more than two per cent as per the Insurance Act. On the other hand, the premium under the two-year premium paying plan is slightly higher and the commission rate is 40 per cent on the first year premium and 7.5 per cent on the second year premium. IRDAI says SBI Life’s corporate agents did not reveal to the policy holders the availability of the single-premium option.