Insurance brokers in a fix over IRDA red tape
Brokers who sell insurance policies to companies are miffed with the industry regulator for its delays in approving a renewal of their licences, saying it is hurting their business.india Updated: Oct 21, 2009 21:12 IST
Brokers who sell insurance policies to companies are miffed with the industry regulator for its delays in approving a renewal of their licences, saying it is hurting their business. The regulator, on the other hand, says the delay is arising from a spate of applications for renewals.
The Insurance Brokers Association of India (IBAI), a self-regulatory body of insurance brokers that groups 270 brokers, says as many as 60 insurance brokers are hit.
The brokers need to renew their licences after every three years. Brokers say premium rates in the non-life insurance sector have already fallen affecting the revenues of the brokers who earn 17.5 per cent of the premium as commission. Delays are making matters worse, they say.
The Insurance Regulatory and Development Authority (IRDA) usually takes no more than three months to renew a licence, but this year, licences have been pending for six to seven months, say brokers. IBAI says 170 insurance brokers sought to renew their licences between May and November and the licences of 60 brokers are awaiting renewal.
“Three years ago, when the huge number of licences had come up for renewals, IRDA had granted licences in a month. But this time, the IRDA is taking several months. Every month, the IRDA sends some query, delaying the approval,” said V. Sithapathy, IBAI’s secretary.
However, a senior IRDA official said, “Last year there were only 35 licences that came up for renewal but this year there are 170. This requires a lot of resources.”