IRDA continues ‘clean-up' of corporate agents

Inspection

The authority had asked both general and life insurers to conduct an inspection of their corporate agents with special emphasis on their qualification and validity of licence.

G. Naga Sridhar

Hyderabad, June 20

Insurance policy holders can look forward to better information and service from corporate agents after September 30.

The Insurance Regulatory and Development Authority (IRDA) would weed out illegal and unqualified corporate agents from the business of selling insurance by that time.

Currently, there are nearly 3,000 corporate agents . Last week, the authority had cracked its whip and withdrawn licences of 4,261 corporate agents who did not renew their licences after March 31.

“There are nearly 3,000 corporate agents with a licence from the Authority. However, we believe that there could be cases of multiple licences and unqualified agents even in this group,'' a senior IRDA official told Business Line.

The authority had asked both general and life insurers to conduct an inspection of their corporate agents with special emphasis on their qualification and validity of licence.

“This exercise will be completed by September 30, after which, we would initiate action on erring corporate agencies,” the official said.

Unauthorised sub-agents

The authority had also noticed that some corporate agents were resorting to the use of introducers or finders or sub-agents to selling polices. The corporate agents were passing on commission to them.

“This is not acceptable under the statute as it could harm the interest of the policy holders. Assume that a person from rural areas buys a policy worth Rs 5,000 or Rs 10,000 from an unauthorised sub-agent or a finder who would vanish after selling the policy. For any kind of servicing, the policyholder needs to come to the city/town which may involve considerable expenses and trouble,” the official explained.

Though there is no direct loss for a policy holder if he buys a policy from an unauthorised/illegal person, the indirect loss could be mis-selling including withholding of vital information (as is happening in case of ULIPs) and lack of post-sales service, he added.