The IRDAI is exploring options to respond to a ruling by the Securities Appellate Tribunal (SAT) which has described an order passed by a member of the regulator as one that "virtually amounts to aiding and abetting corruption".
The legal department of the IRDAI is examining an appeal against the SAT’s order, reports The Hindu citing sources familiar with the matter.
Last Friday, while disposing an appeal filed by Atkins Special Risks, the SAT bench comprising presiding officer Justice JP Devadhar and member Dr CKG. Nair questioned an order passed by IRDAI Member (Non-Life) PJ Joseph and directed the regulator to conduct a probe by a “competent officer” and pass a fresh order.
In a complaint filed with the IRDAI in August 2015, Atkins said between 2002 and 2012 it had provided international reinsurance cover to Jagson International on an annual brokerage or commission basis. Atkins accused Jagson International chairman Jagdish Gupta of demanding a kickback, from 2010, from the commission paid on the cover. Atkins declined to pay the kickback. In 2012, the reinsurance business of Jagson went to Marsh India Insurance Brokers.
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.
As no action was taken on its complaint filed with the IRDAI, Atkins filed a writ petition in the High Court in Hyderabad, which disposed of the petition in September 2017 with a direction to IRDAI to consider the complaint filed by the firm in accordance with law.
Mr Joseph heard the appellant on 16 November 2017 and passed an order on 9 January 2018, disposing of the complaint by “stating that the appellant has not submitted any documentary proof, material information or evidence in support of its contention”. Following this, Atkins filed an appeal with SAT.
According to SAT, the IRDAI order was a “gross abuse of the process of law and dereliction of duty”. The tribunal made it clear that it had not expressed any opinion on the merits of the complaint filed by the appellant.
In a statement on Monday, a Marsh India spokesperson said: “We strongly deny any wrongdoing and find the complaint, filed by the competing broker who lost the business to Marsh India, as baseless and without merit.”