IRDA for insurers opening 25% of new offices in smaller areas
"An insurer that has completed 10 years of business is proposed to be mandated to open at least 25 per cent of new places of business in places where population is not more than 1,00,000," Irda has proposed in its Draft Exposure on Insurance Regulatory and Development Authority (Places of Business) Regulations, 2012.
The proposed regulations have been made to help increase the penetration of the sector in rural and semi-urban areas, Irda said.
The existing regulatory approach of requiring insurers to follow certain requirements while opening/closing/relocating various places of business deserves to be strengthened.
Irda said an insurer having solvency ratio of 1.5 and expenses of management within the extant limits in the preceding three financial years are proposed to be permitted
to open new places of business, in places where population is not more than 1,00,000, 15 days after submitting the information on the same.
"The proposed limit of 1,00,000 on population is, to encourage the opening of places of business in Tier 2 and below towns/villages," it said.
It added that in respect of all other places of business, the insurers will be accorded approvals on an aggregate basis once in a financial year, based on their expansion plans.
However, insurers are allowed to approach Irda for any urgent business proposals for opening any other places
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