The IRDAI has rejected 5Paisa Insurance Brokers(owned by India Infoline Group(IIG) ), application for an insurance broking license, as IIFL Insurance Brokers,another company owned IIG, has already got a license and one group under the existing regulations can’t be allowed two licenses
Hyderabad:
The insurance regulator IRDAI,on Wednesday, has rejected the application of 5Paisa Insurance Brokers(5PIBL), owned by India Infoline Group(IIG),for an insurance broking license.
The IRDAI has rejected the company’s application as IIFL Insurance Brokers, a direct broker, another company owned by IIG, has already got a license and one group under the existing regulationS can’t be allowed two insurance broking licenses.
5PIBL in its application to the IRDAI had said though the the ultimate promoter of IIFLIBL and 5PIBL are one and the same, the latter should be granted an insurance broking license as within the group, each of the entities including 5PCL, as a policy, ensures that all its business/operations, funds/income and expenses, assets and liabilities etc. are directly managed on its own.
There were transactions in the past within the group companies for smooth running of the business and such transactions were in the normal course of business and are strictly on arm’s length basis, said 5PIBL.
Further, it has been submitted by 5PIBLthat there is no commercial arrangement or relationship with IIFLIBL for diverting their clients and their intent is to cater to all the financial needs of the customers under 5Paisa Group.
5PIBL also submitted that IRDAI may consider its application for grant of certificate of registration under same group on merit subject to there being no conflict of interest, IIFLIBL and the applicant entity are distinct and separate in terms of management, business-wise, operational & functionality, infrastructure-wise etc. and are carried on with separate set of human resources and hence, there will not be any conflict of interest and requested the Authority to grant certificate of registration.
However IRDAI rejected the application of 5Paisa Insurance Brokers as the regulations provide for “grant of single broking registration to one corporate group”.