Mumbai, April 26: The Insurance and Regulatory Development Authority (IRDA) has slapped a penalty of Rs 2 lakh on Reliance General Insurance Company for failing to meet rural business targets for 2001-02.
“The company showed zero performance for the rural segment but its work in the social sector is resounding,” said IRDA chairman N. Rangachary. The IRDA chief was in the city to speak at a function organised by the Bombay Stock Exchange.
He added that Reliance General Insurance has issued about 5.4 million policies in the social sector in Gujarat.
Rangachary said the regulator has laid out certain norms for meeting business targets in designated areas including the rural and social sectors.
He pointed out that a large market lies outside urban areas and the rural market, particularly the socially and economically weak sections, requires insurance cover more than the people living in cities.
Rangachary said the gross premium collected by 12 general insurance players as on March 31, 2003, rose to Rs 13,500 crore from Rs 11,600 crore in 2001-02. Public sector players hold a large market share of 90 per cent, while private players hold sway over the rest.
Reliance General Insurance was one of the first non-life companies to get a license from the IRDA. The paid-up capital stands at Rs 102 crore. Sources said it is one of the few companies in the private sector to provide a complete insurance solution.
The company has so far tried to penetrate untapped markets in personal lines, health and niche markets and establish an all-India presence.
According to IRDA, a policy can be categorised as a rural policy if it is sold in an area where the population does not exceed 5,000 with a density not exceeding 400 per square kilometre.