IRDA to examine norms for business via brokers
New Delhi: The Insurance Regulatory and Development Authority (IRDA) plans to examine the reasoning behind the change in guidelines for business through brokers. The move comes following 'big' representations from non-life insurers and large industrial houses. The PSU insurers had objected to the withdrawal of the 5-per cent discount, since this would mean forgoing Rs 100 crore that they can save on brokerage.

The Associated Chambers of Commerce and Industry (Assocham), for instance, had stressed that the move implied a steep increase in the cost of premium by the equivalent percentage. In a letter to the authority, it has recalled the 30 May notification, which was to come into effect from 15 June, that scrapped the discount, contravened the earlier guideline of 27 March. In that, IRDA had stipulated that in case of companies with Rs 1 crore or more of paid-up capital, cooperative societies with Rs 5-lakh-plus paid-up capital, public charitable trusts that were exempt from income tax and any business that was under the direct control of the government, insurers could extend a 5 per cent discount on the face of the policy placed directly with the insurers.
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