Insurance Regulatory and Development Authority (IRDA) will soon come out with a host of new regulations on corporate governance, management control, accounting and tracking the sales record of corporate agents.
“We are issuing corporate governance guidelines in October and this will also include issues of management control,” IRDA chairman TS Vijayan said. IRDA chief made it clear that corporate agents, including banks, and their employees will be responsible for the insurance products sold by them.
On new norms for agents, he said, “a corporate agent is going to be intermediary, representing the interest of the customers. Each of the policy being procured has to be mapped with the person who is actually selling it and has to preserve the record. If at all there is a complaint, IRDA should have a readymade online access to that record, we want to implement that in due course.” This is aimed at preventing mis-selling in the sector.
The amended insurance law has several provisions for levying higher penalties ranging from up to Rs 1 crore to Rs 25 crore for various violations including mis-selling and misrepresentation by agents/ insurance companies.
On the norms for reinsurance companies, Vijayan said, “currently we are planning by October to bring the regulations, interested people are in touch with us and I am sure they will be playing by this month or next month. I expect 6-7 foreign branches to start with.”
“We are also bringing accounting regulations shortly and it will be in place by the first of New Year,” Vijayan said. “We will ask the companies to state their accounts segment wise with the premium, claim, and expenses for the segment in that segment,” he said while addressing the industry at a conference. We hope this will help regulate and curtail the margins in the expense payout through a review of product pricing,” Vijayan said.
“By April 1, 2016 some sanity will come,” he assured. Vijayan asked the industry to offer more protection component to insurance products.