Go Digit General Insurance, SAT Confirms IRDAI Order According to the order, if any person who wishes to carry on insurance business can do so provided that the person gets a registration of a particular class of insurance business under Section 3 of the Insurance Act read with Clause 4 of the Regulations of 200

The Securities Appellate Tribunal (SAT) has reportedly upheld the order of insurance regulator IRDAI directing Go Digit General Insurance to discontinue the product "Digit Group Total Protect Policy" as the product falls under the purview of life insurance which could not be offered by a general insurance company.

According to the order, as reported by TIE, it is said that, "From all the provisions, it is clear that any person who wishes to carry on insurance business can do so provided that the person gets a registration of a particular class of insurance business under Section 3 of the Insurance Act read with Clause 4 of the Regulations of 2000."

"The contention of the appellant (Go Digit) is that their product was already providing cover for accidental death and, therefore, addition of death under Section 29(e) of the modified product did not partake the nature of a life insurance under Section 2(11) of the Act and that only an additional/ancillary benefit was provided to the insured in case of death," it added.

Last year, it was reported that IRDAI had asked Go Digit General Insurance (Go Digit) to discontinue a product offering life insurance benefits in violation of regulatory norms.

The matter related to modification in the Digit Group Total Protect Policy by the insurer in July last year, under which one additional section by name of 'Major Illness Plus Cover' was incorporated in the policy.

The regulator had said upon examination of the modified version of the product, it was found that it offered two benefits in the event of triggering of the covered contingent event. One of the benefits relates to payment of sum insured on diagnosis and/or surgical procedure of major illness.

Another relates to payment of an additional benefit amount in case the policyholder does not survive till the end of the policy period owing to the same major illness and/or surgical procedure for which the claim was admitted. The product offers insurance coverage to 82 major illnesses.

IRDAI had said providing additional benefit amount to the nominees/legal heir of the policyholder in case of non-survival falls within the definition of life insurance business.

Furthermore, Go Digit had asked to immediately withdraw the said clause under the policy in August and was also asked to send the action taken report to the Authority.