SKS Microfinance collected higher than permitted premium, says IRDA

SKS Microfinance collected higher than permitted premium, says IRDASKS Microfinance, India's only listed micro-finance Company, has collected much higher premium than permitted, according to industry regulator, the Insurance Regulatory and Development Authority (IRDA).

J. Hari Narayan, Chairman, IRDA said, "In the group insurance policies, they charged higher premium without informing the clients what is the actual premium. If the premium to be collected is Rs one, they had charged Rs 2."

The regulator said that SKS Microfinance collected more than 100 per cent higher premium than permitted by the regulations. It described the collection of higher premium as illegal. Narayan also said that the final order for the violation of the rules will be issued to the company soon.

The IRDA has started on-site inspections at the company's offices in 2012. The company is still being investigated as the investigation process at the IRDA is a lengthy process involving inspections/raids, seeking explanations and a personal hearing by the Chairman.

SKS Microfinance is the only listed micro-finance company in the country and deals in a number of life and non-life insurers for distribution of products. The company generates a good amount of money as non-core income.