A special CBI court in Ahmedabad has convicted five individuals, including a former divisional manager of a public sector insurance company, for their involvement in a fraudulent insurance brokerage payment scheme. The scheme, which occurred between 2007 and 2010, resulted in financial losses to the government and unfairly benefited private insurance brokerage firms.
The convicted individuals include Madhusudan B. Patel, the then divisional manager of United India Insurance Company Ltd. (UIICL), Pankaj Gupta, the managing director of Ivory Insurance Broker Pvt Ltd., and Inderjot Singh, the director of Safeway Insurance Broker Pvt Ltd. The court also found two private insurance brokerage firms, Ivory Insurance Broker Pvt Ltd. and Safeway Insurance Broker Pvt Ltd., guilty of being involved in the scam.
The CBI investigation, which began in 2012, revealed that Patel and others had issued fraudulent insurance policies, causing financial losses to the government while benefiting private entities. The court found that Patel, in his role as divisional manager, had issued several group personal accident policies to the Directorate of Insurance, Government Insurance Fund (GIF), Government of Gujarat (GOG) without authorization, resulting in an illegal brokerage payment of Rs 2.69 crore.
The court sentenced the accused to five years in prison and imposed a total fine of Rs 5.91 crore, including Rs 5.52 crore on the two private insurance brokerage firms involved in the scam. The court also directed the UIICL departmental head and the Insurance Regulatory and Development Authority of India (IRDAI) to take necessary regulatory action against the brokers.
The verdict highlights the serious legal consequences of financial fraud in the insurance sector and underscores the importance of strict compliance measures within the industry.