The Securities Appellate Tribunal (SAT) has set aside an order passed by the IRDAI in a case filed by UK-based Atkins Special Risks, an insurance broker, which has alleged irregularities in the awarding of an insurance broking contract.
The tribunal says that the impugned order passed by P J Joseph, an IRDAI member (Non-life) virtually amounts to “aiding and abetting corruption in the insurance business by the regulator which cannot be tolerated".
"We set aside the impugned order and direct IRDAI to entrust the matter to a competent officer other than P J Joseph, Member (Non-life), to pass a fresh order on the complaint filed by the appellant on merits and in accordance with law," said the SAT judgment issued on 16 March.
During the years 2002 to 2012, Atkins had provided international reinsurance cover to Jagson International, the SAT said. Atkins alleged in its submission to the SAT that this said firm and its officials started to demand a commission kickback in 2010, which Atkins declined to pay. Following this, Atkins lost the reinsurance contract in 2012.
The appellant alleged that detailed investigation by a globally reputed investigating firm which it had hired showed some alleged kickbacks given to the company by the new broking firm.
The appellant added that a complaint was filed with IRDAI in August 2015. Atkins said that when no action was taken by the regulator, it filed a writ petition in the Telangana and Andhra Pradesh High Court which was disposed of in September 2017 by directing IRDAI to consider the complaint filed by Atkins.
After hearing the appellant, IRDAI member P J Joseph took a decision to dispose of the complaint by stating that the appellant had not submitted any documentary proof, material information or evidence in support of its contention.
However, the SAT judgment made it clear that SAT has not expressed any opinion on the merits of the complaint filed by the appellant.