The Hindu Business Line : Allahabad Bank insurance plan hits roadblock

A question mark has arisen over the proposed non-life joint venture of Allahabad Bank and Sompo Japan Insurance, with the overseas partner having been served a business suspension order by the Japanese regulator, the Financial Services Agency.

"We have asked for more details. We will know by the end of the month," sources close to the development told Business Line today.

Sompo was recently named partner of the joint venture, in which three other entities - IOB, Karnataka Bank, and the Dabur group - are partners.

Earlier this month, the President of Sompo Japan Insurance, Mr Hiroshi Hirano, had to resign after the Financial Services Agency issued a three-month business suspension order over "misconducts".

On June 2, the Japan Economic Newswire reported that the order was issued as a disciplinary step against a series of misconducts, including thousands of non-payments of insurance benefits. As part of the punishment, Sompo Japan will be barred from selling automobile insurance policies and other mainline non-life insurance products for two weeks.

When asked about this, the Chairman of Insurance Regulatory and Development Authority, Mr C.S. Rao, said that the IRDA had no role as yet because "we have not received any application from them (joint venture) so far."

He also no formal application for a licence has been filed by any company with Sompo as a partner.

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