IRDAI Increases Intermediary Limits, Allowing Corporate Agents to Sell Products of Nine Insurers

The regulator said: Insurance distributors (IMF) increased. Currently, CA can partner with 9 insurers (previously 3) and the IMF has 6 insurers (previously 2) in each of the life, general and health business lines for the distribution of insurance products. (one insurance company). The IMF’s reach has also been expanded to cover all registered states. “

Some of the other key proposals approved by regulators include:

Indian Insurance Company Registration: Amendments to the rules relating to insurance company registration in India are aimed at facilitating business and simplifying the process of setting up an insurance company in India. Here are the main highlights of the fix:

• Investing through a special purpose vehicle (SPV) is now an option for private equity (PE) funds, allowing them to invest directly in insurers for greater flexibility.

• Subsidiaries can now also be founders of insurance companies (subject to certain conditions).

• Investments of up to 25% of the paid-up capital by one investor (collectively 50% of all investors) are treated as ‘investors’ and any further investments are treated as promoters only. [Earlier the threshold was 10% for individual investor and 25% for all investors collectively]

• New provisions were introduced to allow promoters to dilute their shares by up to 26%, provided the insurer has a satisfactory solvency record in the last five years and is a publicly traded company.

• Includes indicative criteria for judging ‘good’ status for investors and promoters.

• According to the IRDAI, the investment lock-in period for investors and promoters is stipulated based on the age of the insurer.

Regulatory Sandbox: A regulatory sandbox is a framework that provides companies with a testing environment that allows them to test innovative products, technologies, etc. in a controlled and regulated environment. Promote innovation and technological solutions in the industry. Certain amendments have also been made to the regulatory sandbox rules, extending the duration of the experiment from “6 months” to “up to 36 months” and replacing the existing batch-based approach (cohort approach) to continuous clearance/approval. Clearance/Approval. Provisions for reviewing rejected applications under the sandbox were also introduced as part of the amendment, according to IRDAI.

Appointed Actuaries: Appointed Actuaries (AAs) play a vital role in the operations of insurance companies. Experience and qualification requirements are flexible in order to ensure sufficient actuarial professionals in the industry. Maintaining solvency by insurers is an important aspect of insurer health and AA plays a key role in maintaining solvency levels. The AA’s responsibilities have been strengthened by introducing provisions to identify, monitor, report on, and recommend actions to be taken on risks that affect a company’s solvency position. Insurers also have a duty to ensure that AAs are able to adequately discharge their responsibilities.

Solvency standards for non-life insurers: In order for insurers to efficiently utilize capital and resources and increase insurance penetration for crop insurance, there is a period of time to consider state/central government premiums to calculate solvency positions. Extended from 180 days to 365 days. The solvency factor related to crop insurance will also be reduced from 0.70 to 0.50, which will free up capital requirements for insurers by approximately Rs. 146 billion.

Solvency Standards for Life Insurance Companies: In order to enable life insurance companies to utilize capital efficiently, the solvency calculation factors set out in the Regulations will be revised as follows:

• For unit-linked business (no guarantee) – reduced from 0.80% to 0.60%.

• For PMJJBY – reduced from 0.10% to 0.05%.

This will reduce the capital requirement of around Rs. 200 billion.

Other Forms of Capital: To facilitate the raising of other forms of capital i.e. subordinated debt and/or preferred shares, the requirement for pre-approval from IRDAI has been omitted. The amendment also tightened the limit for raising such capital (the threshold limit was raised from 25% to 50% of paid-up capital and premiums, subject to 50% of the company’s net assets). was received). This allows companies to raise the required capital in a timely manner. According to IRDAI, amendments have been introduced to board oversight in raising such capital.

Bhargav Dasgupta, MD and CEO of ICICI Lombard General Insurance Company, said: The regulator has addressed many of the industry’s concerns in one fell swoop! The regulator’s vision of ensuring insurance for all is truly inspiring and these reforms will go a long way toward achieving that objective. prize. “

Parthanil Ghosh, HDFC ERGO’s President of Retail Business, said: While this step will enable customers to have a wider range of insurers and products to choose from, it will also drive innovation in product development, enhanced use of technology and data analytics, and deliver a seamless customer experience. , which is also expected to improve the level of financial protection. Corporate Agents and IMF Customers”