Subhash Chandra Khuntia, chairman,IRDAI
“One of the demands of the brokers was to have their licenses in perpetuity. We can’t accept it.he current system, where each broker has to renew his license in every three years, is perfectly fine. Even,in some countries, the insurance brokers need to renew their licenses in every two years.’’said Subhash Chandra Khuntia, chairman,IRDA, whiile addressing the 17th Annual Insurance Insurance Brokers’ Summit organized by Insurance Brokers Association of India (IBAI), on Friday.
,Hyderabad:
The insurance regulator IRDAI has said no to the demand of insurance brokers to make their licenses “in perpetuity”.
A perpetual licensing agreement would be valid for an indefinite period of time and would have allowed an insurance broker to use it life time by paying an one-time fee paid to the IRDAI
Currently, the IRDAI regulations stipulate that an insurance broker has to renew his/her license in every three years.
“One of the demands of the brokers was to have their licenses in perpetuity. We can’t accept it.he current system, where each broker has to renew his license in every three years, is perfectly fine. Even,in some countries, the insurance brokers need to renew their licenses in every two years.’’said Subhash Chandra Khuntia, chairman,IRDA, whiile addressing the 17th Annual Insurance Insurance Brokers’ Summit organized by Insurance Brokers Association of India (IBAI), on Friday.
IRDA issues the renewal licenses in 45 days and brokers can apply for the renewals of their licenses before 90 days of expiary of their existing licenses, added Khuntia.
The IRDAI chief asked the brokers community to follow `Code of Conduct’’ meant for them and go beyond act of price discovery for customers and provide them information of various risks faced by them.
The brokers should provide feed-backs to the insurers so that they can develop new products for the market.
“They should bring more capacities
Khuntia also asked IBAI to assume bigger role of a Self Regulatory Organisation(SRO) for the broking community.
“If IBAI can act as a SRO for the broking industry , we are willing to reduce our regulatory responsibilities towards this segment,’’ he said.
Khuntia wanted reinsurance brokers to seek a certificate from reinsurers that the premium collected from the cedants has been paid to them in time..
“We have instances where reinsurance brokers are mis-using the reinsurance premiums for their own purposes and not paying it to the reinsurers as per the agreement,’’ he said.
The IRDAI has found out instances of mis-selling by insurance brokers who are dealing with life insurance policies.
“On the basis of mi-selling complaints received by the IRDAI , almost 11 per cent are related to life insurance policies and 28 per cent of such mis-selling are being done by the brokers,’’ he said.
Khuntia advised the brokers to go digital and spread their services into more of tier ii and tier III cities and towns if not in rural areas.
The brokers should also focus providing their services for the MSME segment which are very negligibly insured.
“The people who are working in MSME sector and their families need all kinds of insurance ranging from health to pension products. In case of any unfortunate mishaps, their families slip into poverty.
Khuntial informed the brokers that IRDAI would soon unveil standard indemnity policy which is mandatory for a broker.
He pointed out that 1.28 crore standard Covid policies with a total premium of over Rs 1000 crore have been sold so far.
`Under Carona Kavach, which is the standard product, 42 lakh lives have been protected, while 5.36 lakh lives have been protected through Corona Rakshak.
Currently, there are 489 insurance brokers licensed in the country and almost 26 per cent of the domestic general insurance business is placed through this segment of intermediary.