Insurance
IRDAI’s stick for individual agents and carrot for big players
IRDAI’s draft on commission, remuneration and reward will make individual agents frown and all other intermediaries cheer. Reward based on an objective can be 20% of first year commission for individual agents while other intermediaries can earn up to 40%!
 
The Insurance Regulatory and Development Authority of India (IRDAI) has ushered a new year with bad news for individual agents. The IRDAI draft titled “Payment of commission or remuneration or reward to insurance agents and insurance intermediaries, regulations, 2016” caps the reward based on an objective and transparent criteria to individual insurance agents over and above the commission or remuneration being not more than 20% of first year commission or remuneration and 40% of first year commission or remuneration in case of insurance intermediaries. It means corporate agents; brokers and other insurance intermediary will end up getting much higher rewards than individual agents get. The reference is for the rewards, which are over and above the commissions!
 
IRDAI has tried to justify the huge difference stating “However higher rewards for insurance intermediary vis-à-vis insurance agent as the insurance intermediary has higher establishment costs and compliance requirements.” But, isn’t individual agent also insurance intermediary as per IRDAI intermediary handbook? It specifies, “An Insurance Intermediary means individual agents, corporate agents including banks and brokers –they intermediate between the customer and the insurance company.” Read  
 
But, IRDAI’s draft differentiates between insurance agent and insurance intermediary. “Insurance Intermediary” is as defined in Section 2(f) of the IRDA Act, 1999 and includes Corporate Agents, Insurance Brokers, Web Aggregators, Insurance Marketing Firm and Any other entity as may be recognized by the Authority.
 
The draft specifies the safeguards for an individual insurance agent. There are safeguards provided under the regulations to an individual agent as required under the Act. These include: 
 
a)  No insurer to terminate, suspend or cancel the letter of appointment of an individual insurance agent on frivolous grounds and in an arbitrary manner; 
 
b) The insurer may terminate, suspend or cancel the letter of appointment of an individual insurance agent only in the manner as laid down under the Board approved policy; 
 
c)  No insurer shall transfer the policies solicited and procured by an individual insurance agent, so long he is engaged by the insurer as their insurance agent; and 
 
d) The operation of this sub-regulation shall be reviewed by the Audit Sub-Committee of the Board and its report submitted to the Board for their review.
 
The underlying approach in framing the regulations is as follows:
 
a) To have uniformity as regards the segments of business vis-à-vis the expenses of management, commissions and manner of computation of solvency margin.
 
b)    Same commission and remuneration for insurance agent and insurance intermediary 
 
c) However higher rewards for insurance intermediary vis-à-vis insurance agent as the insurance intermediary has higher establishment costs and compliance requirements.
 
d) Parity in commission remuneration to health segment being solicited under the life insurance category and general stand-alone category.
 
The objectives of the Policy shall include the utilization of insurance agents and insurance intermediaries in the manner that: a) increases insurance penetration and density in the country; b) is in the interests of the policyholders; c) is commensurate with the business strategy; d) brings cost efficiencies in the conduct of business and simplification of the administration of insurance business; e) gives an indication on the relative degree of importance placed on each of them.
 
These regulations will be effective from 1 April 2016. IRDAI is seeking comments or suggestions on the proposed regulations for consideration.  The comments or suggestions should reach them by 27 January 2016 in the specific format by e-mail to commission@irda.gov.in and randip@irda.gov.in.
 

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COMMENTS

Avinash Murkute

1 year ago

I sincerely suggest IRDA to punish nodal officers of insurance companies and intermediaries who don't even bother to reply to complaints. They are least bothered about IRDA. I would like to share my recent experience, a broker named Aditya Birla Insurance Brokers makes calls from number which can not be dialled back. (this number does not exist). The agents are more happy to sell policies without providing proper replies. They are trained to answer only what they know and their seniors also don't bother to answer real questions and provide false information. They don't know who will provide recordings and in how much time it will be provided and in what manner it shall be provided. Hope IRDA takes a note of this feedback proactively. Aditya Birla Group Nodal Officers - Hope you read MoneyLife.

SC asks Mysuru lab to test more samples of Maggi noodles
New Delhi : The Supreme Court on Wednesday asked Mysuru-based CFTRI lab to get more samples of Maggi to test the lead and Mono Sodium Glucomate (MSG) contents in its taste makers.
 
The apex court bench of Justice Dipak Misra and Justice N.V. Ramana also asked the Central Food Technological Research Institute (CFTRI) to tell if the lead content found in its tests of Maggi carried out in October, in pursuance to the order of NCDRC, was within the limit prescribed under the food safety law and rules framed under it.
 
Giving the lab two months time to carry out the tests and submit its report, the court said if the lab needed more samples, it should ask for them.
 
The next hearing of the matter is on April 5.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

 

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COMMENTS

Subramani P K

1 year ago

All junk food of any make should be banned as all of them are having some ingredient or other which is harmful. Besides, the chemicals used to add taste, colour & preservative for long shelf life etc are another set of injurious chemicals and should also be banned. When plenty of fresh eatables are available why go in for these good for nothing products & spoil health by spending money on them. Consumers should be aware of the after effects of these food items in the market. Govt. should also ban the advt. of these products in media.

Airtel sells Burkina Faso, Sierra Leone operations to Orange
New Delhi : Bharti Airtel has sold its operations in Burkina Faso and Sierra Leone to French telecom giant Orange, the firm announced in a statement here on Wednesday.
 
"Orange will acquire 100 percent of the two companies' share capital. The consolidated revenue of the two companies is around 275 million euros. These acquisitions will be implemented in partnership with Orange's subsidiaries in the CA'te d'Ivoire and Senegal," the statement said.
 
The completion of these transactions remains subject to approval by the competent authorities.
 
Lazard and Société Générale were advisors to Orange for this transaction. Airtel was advised by Arma Partners LLP.
 
Through this deal, Orange will reinforce its presence in Africa with two additional countries, adding almost 5.5 million customers to its mobile customer base.
 
The statement said this agreement is further to the initial contract signed between Airtel and Orange in July 2015 regarding the potential acquisition of Airtel's operations in Burkina Faso, Sierra Leone, Chad and Congo Brazzaville.
 
The agreements regarding potential transactions in the remaining two countries have lapsed.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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