IRDA issues norms for brokerages

Hyderabad: The Insurance Regulatory and Development Authority (IRDA) has decided to bring back the five per cent discount which can be availed of by corporates for a one year period in their annual insurance policy.

The public sector units and private companies with a capital of Rs 0.1-3 crore can avail of the special discount of 5.0 per cent (in place of agency commission or brokers remuneration), when they cover their risks directly with a general insurer.

Companies with a capital base of over Rs 3.0 crore will have the option of either availing the 5.0 per cent discount when they go for fire, petrochem, engineering and other tariff business directly with an insurer or seek the advise of brokers or agents.

In a circular issued to all general insurers, IRDA on has fixed the agency commission and brokers' remuneration rates, which vary between 5-17.5 per cent depending on the type of risks covered and the size of the company. The new rates will be applicable from April one for a period of one year.