SBI Life to appeal against insurance regulator's order of Rs 275-crore refund

SBI Life Insurance will appeal against an order by the Insurance Regulatory Development Authority (Irda) directing the private sector life insurer to refund Rs 275 crore to policy holders.

"We shall seek a review in the matter as per the recourse available to us under the Insurance Act and other statutes," the company said in a statement.

As per the spokesperson of the insurance firm, it will appeal before the chairman of Irda very soon without divulging the timeline.

Insurance regulator Irda on Tuesday asked SBI Life Insurance company to refund Rs 275.29 crore to policy holders as the amount was collected from them in violation of norms.

"The amount of Rs 275,29,48,437 to be refunded as directed in these orders shall be debited to shareholders account. The above action to be initiated immediately and shall be completed within six months," Irda had said in its order.

The order was issued after an enquiry that revealed SBI Life Insurance was charging the second year premium along with the first year premium on its Dhanaraksha Plus Limited Premium Paying Term (LPPT), a group insurance policy. It relates to policies issued during 2008-09, 2009-10 and 2010-11.

However, when asked regarding these violations, the spokesperson said the company will appeal before the Irda chairman and is confident that a fair outcome will prevail subsequent to the presentation of their case.

SBI Life Insurance is a joint venture between State Bank of India, the country's biggest lender, and BNP Paribas Cardif.