July 28, 2015
The Indian Broker Association (IBAI) is miffed with regulator IRDAI over its non-inclusion in the General Insurance Council (GIC) and wants the Finance Ministry to intervene to fix the “flaw” in the Insurance Act.
IBAI is a professional body of 400 insurance brokers while GIC represents 28 general insurers in the country.
The recently passed Insurance Amendment Act mandated that professional bodies like GIC and Life Insurance Council should be restructured by including professional representatives from the industry to operate like a self-regulatory organisation (SRO).
Accordingly, GIC just completed a revamping exercise by including five nominated members in its executive committee – third party administrator, agency, surveyor, policy holders’ representative and a person of eminence but not part of the insurance industry selected by IRDAI.
However, IRDAI didn’t include any member of the broking community, saying it doesn’t fit into any category mentioned in the Act whose representatives can be included in GIC.
Even though IBAI had pleaded with both, GIC and IRDAI, to review their decision, but its request was rejected.
Speaking to PTI, IBAI President Sohanlal Kadel said: “When I met IRDA chief T S Vijayan, he said he was helpless as there was no provision in the Act for inclusion of brokers in the executive committee (EC) of GIC.”
“On the other hand, the regulator has included agents, surveyors and TPAs in GIC. All these persons are directly in the hands of insurance companies and it is the broker who is not under their direct authority. We are trying to meet Finance Ministry officials and others concerned to remove this flaw in the Act,” he added.
IBAI had argued that brokers can be categorised under policy holders’ representatives since they render professional services to customers. IRDAI and GIC rejected this plea.
Insurance brokers are a key component in the industry. According to an estimate, around 20 per cent of premium in the general insurance industry, whose current market size is Rs 90,000 crore, comes through brokers.
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