The Insurance Regulatory and Development Authority (“IRDA”) has vide its circular dated June 07, 2010 (“Inspection Circular”) mandated the insurance companies to carry out regular, annual on-site inspection of corporate agents. According to the Inspection Circular, the inspection process should be completed by 30th day of September every year, starting from year 2010.
Inspection Circular provides detailed checklist for an on-site inspection of corporate agents, by directing the insurer to verify the following:
1. As stipulated under the IRDA (Licencing of Corporate Agents) Regulations, 2002 (“Corporate Agent Regulations”), the insurance policies are sold only by licenced agents or ‘specified persons’. IRDA has also warned against the practice of employing the ‘specified persons’ merely for completing the regulatory formalities, while the actual distribution is undertaken by unlicensed distributors.
2. The corporate insurance executives and the specified persons of the corporate agent possess the necessary qualification and practical training required under the Corporate Agent Regulations. Further, the insurer shall verify that the specified persons and the corporate insurance executives, who shall also be employees of the corporate agent, have the requisite knowledge and capability to procure insurance business.
3. The corporate agent acts as such for only one life insurance company or one non-life insurance company or both life insurance and non-life insurance company only as a composite corporate agent.
4. The director or chief executive of a company (being a corporate agent), or partner of a firm (being a corporate agent), and corporate insurance executive or a specified person of the corporate agent do not hold any position of responsibility with any other corporate agent, broker or third party administrator (“TPA”) or be on the rolls of other insurer.
5. The specified person has surrendered his/her certificate to the corporate agent, in accordance with Regulation 10(6) of Corporate Agent Regulations, once (s)he ceases to be the employee of that corporate agent. The said certificate must be destroyd and not be used by any other person.
6. The corporate agent has maintained a register that contains the name, address, telephone numbers, photographs, date of commencement of employment, date of leaving of service, and salary paid, if any, of the specified person.
7. Every group insurance sold by the insurer through a corporate agent must have complied with the guidelines on group insurance issued by IRDA.[1]
8. No payment, by any name called, other than the commission allowed under law is paid to the corporate agent in respect of the business for which the agent is paid the agency commission.
9. The corporate agent has not compelled the buyer to buy the insurance product, by making such insurance product ancillary to any other product (like banking product) of the shareholder or associate of the corporate agent.
10. The corporate agent has maintained complete records of sale process in respect of the business solicited by it, which records can be used by the insurer as and when required or for any other judicial proceedings, as the case may be.
11. The corporate agent has complied with requirement of receipt of the premium in advance set out in section 64VB (no risk to be assumed unless premium is received in advance) of the Insurance Act, 1938 (“Insurance Act”) in the form specified by the applicable regulations of the IRDA.
12. The corporate agent has maintained the claim records in a manner to esnure compliance with Regulation 9(1)(f) of the Corporate Agent Regulations. The said regulation mandates the corporate agents to extend all possible help and cooperation to an insured in completion of all formalities and documentation in the event of a claim.
13. The agent has not violated the provisions of section 40A (limitations of expenditure on commission), section 41 (prohibition on rebates) and section 43 (maintanenance of register of insurance agents) of the Insurance Act.
14. The monthly statistics of the business transacted by the corporate agent is in order.
15. The audited accounts of the corporate agent must be verified to establish, among other things, that the commission obtained by the corporate agent is not shared with any other person including the specified persons or the employees.
Inspection Circular further provides that the insurer on the date of inspection should further verify and be satisfied of the fact that:
1. The corporate insurance executive is not a minor.
2. The corporate insurance executive is not of unsound mind.
3. The corporate insurance executive has not been found guilty of committing, attempt to commit or abetment of offences like criminal misappropriation, criminal breach of trust, cheating or forgery.
4. The corporate insurance executive has not been found, guilty of, or to have knowingly participated or connived in any fraud, dishonest, or misrepresentation against an insurer or insured in the course of any judicial proceedings relating to any policy of insurance, winding up of an insurance company or in the course of an investigation of the affairs of an insurer.
5. The corporate insurance executive has complied with the code of conduct as provided under Regulation 9 of the Corporate Agents Regulations.
Lastly, the Inspection Circular requires the insurers to inspect the status of compliance by the corporate agent of the obligations under IRDA (Insurance Advertisements and Disclosures) Regulations, 2000 and under IRDA (Protection of Policyholders’ Interest) and recommend the necessary action under Regulation 11 of the Corporate Agents Regulations.
ReplyDeleteManagement
Please Click Above Link here & Get information and latest ideas about Best, Management
I recently found many useful information in your website especially this blog page.Thanks for sharing...
ReplyDeleteWelding inspector Norway
Third Party Inspection London
It's really nice and meanful. it's really cool blog. Linking is very useful thing.you have really helped lots of people who visit blog and provide them usefull information. detective agency in Delhi
ReplyDelete