India’s insurance regulator on Tuesday stipulated that a corporate agent can represent up to three life/general/health insurers while prohibiting insurers paying any sign up fees or incentives to corporate agents or their employees.
Laying down a minimum networth of Rs.50 lakh for a corporate agent, the Insurance Regulatory and Development Authority of India (IRDA) said the regulations governing remuneration to the insurance intermediary would be notified later.
The new rules called Insurance Regulatory and Development Authority of India (Registration of Corporate Agents) Regulations, 2015 has been notified in the official gazette and would come into play from April 1, 2016 onwards.
The IRDAI has uploaded the new regulations on its website on Tuesday.
The regulations expressly prohibit insurers from paying of any sign up bonus to a corporate agent or any incentives (cash or non-cash) to principal officer, specified people or its employees.
As per the new rules, one group of companies can normally have only one corporate agency registration subject to exceptions based on merits if there are no conflict of interests.
A corporate agent should have a professional indemnity policy in case of income from insurance intermediation exceeds 50 percent.
The professional indemnity policy should be for a value of two times the remuneration from selling insurance subject to a minimum of Rs.15 lakh and a maximum of Rs.1 crore.