However,the delay in the entry of brokers into the market would not impact greatly on the types of covers sold initially, say industry officials. The regulations continue to be on hold because the government has not yet moved to amend the Insurance Act to provide for paying commission to brokers.

The cap of 17.5 per cent on commission to insurance brokers stipulated in the draft regulations is here to stay, despite a section of industry favouring flexibility.

As regards the level of commission, some aver that it should be directly related to the effort an intermediary puts in serving his or her client. A senior official with a foreign insurer pointed out that in many overseas markets, a broker may only be involved in introducing business to the insurer and wish the insurer to complete all the follow up; conversely, there may be other brokers who effectively operate as the insurance department of the insured.

According to him, the value of the broker's commission is negotiated on the basis of the value accrued to insurer and insured, and ought not be subject to regulatory ceilings.

Officials in the Insurance Regulatory and Development Authority (Irda), though, said there had to be a limit to the extent of commission in a newly liberalised market, because there could be too much undercutting otherwise.

They said that just as there was a prescribed commission for agents, other intermediaries too would need to follow ceilings.

Interestingly, with the market opening up finally, it seems that international broking firms that were holding out, demanding 49 per cent FDI in such specialised activity, seem to be rethinking their tactics.

Thus, not only are reinsurance brokers already active here - gearing up to take up direct insurance broking, multinationals too are actively chalking out plans to do exactly the same.