Irda Warns Brokers Against Misuse Of Top Officers Posts

Mumbai, Aug 26 | Updated: Aug 27 2004, 07:08am hrs
Continuing its drive against the errant elements in the liberalised industry, the Insurance Regulatory and Development Authority (Irda) has cautioned the broking community against the rules and regulations contained in Irda (Insurance Brokers) Regulations, 2002.

Such warnings have been issued after Irda noticed that principal officers of licensed insurance broking companies are engaged in other activities, apart from performing duties of a principal officer.

Instances have also come to the notice where principal officers have left the services of broking companies and the same was not brought to the notice of the authority immediately but after a lapse of considerable time, said Mathew Verghese, member, Irda.

In some cases, the principal officer was deputed to look after other assignments in the group companies while working as principal officer.

Further, it has also come to the Authoritys notice that broking companies have appointed personnel from other broking companies without the incumbent principal officer resigning from his earlier position. The Authority has reminded the fact the existing regulation envisages the post of principal officer as a full-time post and not a part-time one and with considerable amount of responsibility attached to it.

He is responsible for conducting the affairs of the broking company in a professional manner and as per the rules and regulations laid down by the Authority. He is the interface between the customers and the insurers. and acts as a link between the regulator and the broking Company.

The principal officer of a broking company is not permitted to look after any other assignment or position so long as he is the principal officer of a broking company, even for a temporary period.

Any change in position of the principal officer of a broking company should be brought to the notice of the Authority without loss of time and the position of principal officer of an insurance broking company cannot be kept vacant.

The broking company should ensure a substitute, who fulfils all the eligibility requirements and does not suffer from any of the disqualifications under section 42 D of Insurance Act, 1938, etc., before it relieves the current officer.