In June of 2022, IRDAI had issued a showcause notice to Acko Insurance co for quoting premium of only Rs 2299/- for private car insurance. IRDAI had noted that the insurer in their advertisement had shown a Hyundai I10 vehicle with premium of Rs 2299/- only, however it would be very unlikely that said vehicle would be insured at such low premium. IRDAI further in their noticed had levied a fine of Rs 1 crore on the company for said mis information.
IRDAI had observed from the premium illustration provided by the insurer, premium of Rs. 2299/- is for private car package policy with assumption of IDV of Rs.1,00,000/-, NCB 50% and engine capacity not exceeding 1000 CC. However, in the advertisements, pictures of Sedan type cars are depicted which normally have cubic capacity of engine exceeding 1000 CC and for such private cars the prescribed third party premium starts from Rs. 2,863/- and not as illustrated by insurer.
Acko post the notice had approached the Securities Apellate Tribunal (SAT) and SAT had quashed the IRDAI order. SAT further remitted the matter to Authority to pass a fresh order and allow for an oppurtunity to the insurer for a personal hearing. Later on IRDAI had allowed for personal hearing with key members of the company in April 2023.
Mr Sanjeev Srinivasan, CEO & MD; Ms Karishma Desai, CCO and Mr Biresh Giri, Appointed Actuary of Acko Insurance had attended the personal hearing and referred their submissions which were earlier made in response to the IRDAI showcause notice. In their response, Acko had informed There are certain variants of Sedan and SUV cars available in the market with an
engine capacity of less than 1000 CC for which the premium band stated in the advertisement would be applicable. (Ex: Sedan variants - Volkswagen Ameo, Mahindra E-Verito & SUV variants — Hyundai Venue, Ford Ecosport).
Advertisement contains general information and falls under “invitation to inquire” category with the intent of creating a desire to inquire further about the product.
IRDAI upon evaluating the submissions of the company, left the Insurer is with only caution to exercise care and diligence in releasing advertisements and informed not to quote features/benefits that are applicable under extreme/exceptional scenarios.
Read further details on the IRDAI order below:
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