Chennai, Sep 3 (IANS) Acting tough, India's insurance regulator Tuesday directed private life insurer HDFC Standard Life Insurance Company Ltd to reopen all the death claims settled under two of its policies and settle the differential amount to the claimants.
The Insurance Regulatory and Development Authority (IRDA) also directed the insurer to increase the policy benefits to all the policyholders of its two products.
The additional outgo and the benefits should be accounted under the company's shareholder's account and not from the policyholder's funds, the IRDA ordered while warning HDFC Standard Life not to violate its file and use guidelines.
The IRDA found HDFC Standard Life discriminating between two sets of policyholders - those who had bought the HDFC Life Sampoornam Samridhi Plan and HDFC Classic Assure Plan before March 31, 2012 and those who bought the policy after April 1, 2012.
According to IRDA, the life insurer had offered higher benefit to those who had bought the two policies after April 1, 2012 as against those who had bought the products prior to that date.
The IRDA said HDFC Standard Life issued policy endorsements assuring additional death benefits which is equivalent to higher of ten times annualised premium or the death benefit as defined in the policy under two of its products for those who bought the policies on or after April 1, 2012.
For those who bought the products prior to that date, the death benefits payable is the basic sum assured, reversionary bonus plus interim and terminal bonuses if any.
The company debited its shareholder's account the additional premium amount for the higher cover for those who bought the policies on or after April 1, 2012.
The IRDA did not agree with the insurer's contention that the additional benefit was offered to those who bought the policies on or after April 1, 2012 as the rules relating to tax exemption were changed.
Terming the insurer's action as discriminatory between two sets of policyholders IRDA directed HDFC Standard Life to reopen claims on policies prior to April 1, 2012 (from the late of launch of two policies) and settle the additional amount within 60 days of the order.