The report was prepared by a committee constituted by Irda last year, which was headed by P C James, professor of National Insurance Academy. The committee has recommended that sub-brokers maybe allowed to sell micro-insurance and combo products, which will cater to the needs of rural people. If the sub-broker is terminated for any reason, the main broker will be responsible for servicing the policies sold by the sub-broker
The intermediaries who represent insurers are tied agents, corporate agents, banks and micro insurance agents. Since 2010 the insurance regulator has notified distance marketing guidelines, web aggregators' guidelines and modified referral guidelines, which aim to help insurers increase the spread.
The regulator has underlined that no significant steps have been taken to further strengthen the channel of insurance broking, even though insurance brokers are the representatives of the customers.
“It is a fact that there have been reports about mis-selling of insurance products, both in life insurance and general insurance. The complaints on misselling from customers have increased over the years,” says the Irda report on insurance sub-broking.
The committee has recommended that brokers who have completed at least one full financial year can sponsor a sub-broker. It has also clarified that part of a financial year will not be considered while checking the eligibility to sponsor. The
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