Irda forms committee to review insurance broker regulations
New Delhi: Insurance Regulatory and Developement Authority of India (Irda) has formed a committee to review insurance broker regulations, existing practice and other matters related to insurance broking.
The terms of reference of the committee include review of the entire Irda (Insurance Brokers) Regulations, 2002; reviewing the existing practice and evolving a standardised process to assess the gravity of violation for imposition of appropriate penalties.
Besides, it will also look into possibility of allowing the broker to apply afresh to the authority in case the authority has cancelled or refused the renewal of licence of an insurance broker as well as related matter in insurance broking.
Referring to Finance Minister's Budget 2013-14 announcement of permitting banks to act as insurance brokers, Irda in a statement said this may pose new challenges in monitoring activities and regulating the insurance brokers.
"If sub broking is allowed, authority expects majority of brokers will utilise this model and recruit sub-brokers under their fold and this may pose new/further challenges in monitoring their activities and regulating the insurance brokers," it said.
In view of this, it has been decided to form a committee, Irda said.
It said the Irda Regulations, 2002 are "silent" about dealing with requests made by the insurance broker, in case where the authority has cancelled or refused the renewal of licence of an insurance broker.
"There is no mention of procedure to be followed in case of such aggrieved brokers whose licence is cancelled...Either in Insurance Act, 1938 or the Irda Regulations, 2002," it said.
The seven member committee will be chaired by Suresh Mathur, Senior Joint Director, Irda. Other members of the committee include officials from Irda and insurance companies.
The committee is expected to submit its report by April 30, 2013.
Irda has so far issued 345 insurance broker licences and the licence is valid for three years from date of issue.
The insurance regulator also said recently it has formed a committee to look into aspects of sub-broking in India and the committee submitted its report.