SBI Life will appeal to the Insurance Regulatory and Development Authority against the latter’s directive to refund ₹275.29 crore to policy holders in relation to a case of alleged mis-selling of a group insurance policy.

“We shall seek a review in the matter as per the recourse available to us under the Insurance Act and other statutes. We are confident that a fair outcome will prevail subsequent to the presentation of our case with the Appropriate Authority,” said SBI Life in a release.

The life insurer, which was earlier fined for mis-selling its Dhanraksha Plus LPPT through SBI and associate banks, has now been asked to refund the excess commission it has paid banks out of the premium collected under this policy.

“The amount of ₹275.29 crore to be refunded as directed in these orders shall be debited to shareholders’ account. The above action is to be initiated immediately and shall be completed within six months,” said IRDA in an order. The beneficiaries of this order will be those who purchased Dhanraksha Plus LPPT between financial years 2008-09 and 2010-11. The policyholders will get 44 per cent of the ₹625-crore premium that they collectively paid for the cover.

The regulator said that between the years 2008-09 and 2010-11, corporate agents, mainly SBI and associate banks, sold the policies to customers by charging the second year premium along with the first year’s, which resulted in commission payouts of 40 per cent and 7.5 per cent, respectively, for the two years.

According to a senior IRDA official, the insurer has been fined under section 34(1) (b) of the Insurance Act under which the life insurer can make a representation against the order to the regulator and IRDA can review or modify the order.

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