Online edition of India's National Newspaper
Friday, Jul 15, 2005

About Us
Contact Us
Business
News: Front Page | National | Tamil Nadu | Andhra Pradesh | Karnataka | Kerala | New Delhi | Other States | International | Opinion | Business | Sport | Miscellaneous | Engagements |
Advts:
Classifieds | Employment | Obituary |

Business Printer Friendly Page   Send this Article to a Friend

Group insurance norms tightened

IRDA imposes restrictions on corporate agents

NEW DELHI: In a bid to check unfair practices by insurers and intermediaries to capture more business, the Insurance regulatory and Development Authority (IRDA) on Thursday tightened the norms for group insurance schemes and corporate agents.

The IRDA said that a `group' should consist of persons who assemble together with a commonality of purpose or engaging in a common economic activity like employees of a company.

However, other groups like welfare society, credit card holders, borrowers of a bank and professional associations may be treated as a group, provided the organiser has an authority from a majority of the members to arrange the insurance cover.

"No group should be formed with the main purpose of availing insurance... A person negotiating group insurance rates and then going around finding members to insure will not be considered as a legitimate group,'' it said.

The IRDA also barred insurers from offering cover to a member, who leaves the group. Similarly, entry into the group insurance scheme for an individual will be permitted from a well-defined date.

Insurers have been asked to sell group insurance schemes either directly or through an agent and not through a person who does not have a licence.

They should specify the premium charged and benefits admissible to each member of the group.

The group manager will not have the liberty to vary the premium rates or benefits for individuals unless it is predetermined.

In case of corporate agents, the IRDA has barred agents from using introducers or finders or sub-agents, for selling contracts.

It also prohibited corporate agents from passing on the varying levels of commission to the sub-agents or improperly charging a higher premium than paid to the insurer and using the margin to pay the same person.

The regulator has however relaxed some of the norms for micro-finance institutions. — PTI

Printer friendly page  
Send this article to Friends by E-Mail

Business

News: Front Page | National | Tamil Nadu | Andhra Pradesh | Karnataka | Kerala | New Delhi | Other States | International | Opinion | Business | Sport | Miscellaneous | Engagements |
Advts:
Classifieds | Employment | Obituary | Updates: Breaking News |


News Update


The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription
Group Sites: The Hindu | Business Line | The Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |

Copyright 2005, The Hindu. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu