After stopping issuing corporate agency license several
months ago, the Insurance Regulatory and Development Authority
(IRDA) has come out with its guidelines for corporate
agents. The ban on licensing new corporate agents had
affected several private life insurers.
to P Nandagopal, senior vice president, Alternate Channels
and Group Life, "In a overall sense, the new guidelines
bring some discipline into the system."
those in the industry have expressed some reservations.
"The requirement of educational / professional qualifications
for corporate agents is not very appropriate considering
experience in itself is a good source of education and
the IRDA exam anyway tests their knowledge. If IRDA wants
it can further tighten the exam standards," says
an official of a private life insurer.
to an executive from MetLife Insurance Company Private
Limited, the insurers will incur additional expenditure
if it has to monitor the compliance of its corporate agents.
the decision to permit only insurance qualified persons
to man the corporate agency, the MetLife executive added
that the start up capital of Rs15 lakh, appeared high
and would restrict the small professional players from
entering the business.
an official of Life Insurance Corporation of India is
in agreement with IRDA. According to him, only new companies
will be required to satisfy the capital norms. "For
serious players, the minimum start up capital will not
be a deterrent."
to him, the old regulations permit partnership firms and
sole proprietorships to act as corporate agents. "The
new guidelines are silent and perhaps we have to construe
that the provisions of old regulations will apply where
there is nothing contrary in the new guidelines."
is also in favour of IRDA restricting multiple corporate
agencies with different insurers and prohibition of sub-agencies
and other intermediaries under the corporate agents.
are others who differ. According to one official of a
Mumbai based life insurer, "In the modern corporate
world, as long as there is arms length relationship between
managements of companies, there should not be any restrictions
on who they want to tie up and why."