Book agents for 3 yrs: IRDA

Book agents for 3 yrs: IRDA

Insurance cos told to enter into agreements to protect investors

Every insurer shall enter into the agreement with their agents or corporate agents for a term not less than three years,” the Insurance Regulatory and Development Authority) said in a circular on Tuesday The instruction was issued after Insurance Regulatory and Development Authority (IRDA)came across instances of agents or corporate agents opting for transfer of agency or corporate agency agreement from one insurer to another.

Problem for policyholders
In such cases policyholders are experiencing difficulties with regard to service aspects of their policies, and are left to fend for themselves or forced to switch the insurer, thereby losing the benefits of the existing policy, IRDA said. However, the insurer may terminate the agreement in case of non-performance of agency or fraud by the agent or corporate agent, the insurance sector watchdog said.
“All the insurers shall also make adequate arrangements for servicing of the policies earlier serviced or being serviced by the agent or corporate agents who wishes to leave the insurer,” it said.

It is essential that all such policies are serviced by insurers as per the service levels prescribed for the agent or corporate agent, IRDA said. Mere provisions of call-centre facilities would not be sufficient for fulfilling services prescribed by the IRDA, the regulator said.

Insurers and their agents or corporate agents should inform in writing, all such policyholders in full detail about the arrangements made to service their policies, IRDA said.

“No insurer shall issue NoC to their agents or corporate agents leaving their organisation to tie-up with another insurer unless the policyholders are informed in writing.”

The insurer should also maintain a distinct cell or helpline number to provide services to the policyholders of the agents or corporate agents leaving the insurer for a period of six months from the date of granting NoC, it said.
Insurers should also submit to the authority a list of all such agents or corporate agents for whom such arrangements have been made every quarter, it said.
“Insurer shall not release renewal commission of agents who have left them before completing five years of service,” IRDA said.