The Insurance Regulatory and Development Authority (IRDAI) said on October 14 that it had fined Max Life Insurance Company a total of Rs 3 crore for breaching rules in the Axis Bank-Max Life transaction.

The insurance regulator said historical transactions between Axis Bank and Max Financial violated the IRDAI code. It has directed Axis Bank to pay Rs 2 crore within 21 days for breaching the rules.

“By engaging in a share transfer transaction with the promoter/shareholder of an insurance company (Max Life Insurance Co Ltd) in contravention of the Authority’s instructions, the company acting on behalf of Axis Bank Ltd circumvented the maximum limit on commissions or remuneration or 2016 IRDAI (To Insurance Agents) The incentives set out in the Payment of Commissions or Remuneration or Incentives by Individuals and Insurance Intermediaries Regulations are read together with Section 18(1) of the IRDAI (Registered Institutions) Regulations 2015. The insurance regulator noted that the total amount of fines should be remitted to Axis Bank Limited within 21 days (only Rs 2 crore),” the insurance regulator noted.

It expects the company’s share price to rebound to an all-time high of around Rs 2,070 in the coming months and outperform the benchmark. IRDAI said Axis Bank was penalised for breaching share transfer norms.

Meanwhile, shares of Axis Bank were down 0.19% at Rs 800.70 per share in BSE trading late on Friday, while shares of Max Financial Services were down 2.46% at Rs 720.65 per share.

Last year, after a long wait, the diversified Max Group sold a 13% stake in Max Life Insurance Company to the country’s third-largest private sector lender, Axis Bank, which will then become the insurer’s co-sponsor.