IRDA bars companies from data deals with sub-Rs 1 crore entities

The Insurance Regulatory and Development Authority (IRDA) has asked the insurers to submit a compliance report in this regard by August 12.

"Insurers are hereby advised to confirm compliance with the regulations... not later than August 12, 2010," IRDA said in a circular.IRDA said that the existing referral entities that do not qualify for sharing data under the new regulations would have to be "terminated right away."Under a referral arrangement, insurance companies get the data base of prospective clients for a fee from another company, mainly banks.

As per the IRDA (Sharing of Database for Distribution of Insurance Products) Regulations, 2010, the referral company should have a minimum net worth of Rs 50 lakh and a minimum turnover of Rs 1 crore during the previous three consecutive years.Also the referral company should not have a referral arrangement with another insurer carrying out the same class of insurance business.