Irda warns insurance cos on branch closure

Mumbai, Dec 29 | Updated: Dec 30 2006, 05:30am hrs
The Insurance Regulatory & Development Authority (Irda) has warned the insurance companies, which are closing down their branch offices/ satellite offices arbitrarily causing inconvenience to the policy holders.

It has come to the notice of the authority that places of business of the insurers are being closed /relocated without proper notices to the policyholders causing them a lot of inconvenience. The authority is also in receipt of complaints from the affected policyholders, said Irda in a circular adding that such closures should also be reported to the authority within one month from the date of such closure.

Insurance companies are advised that the decision for closure/relocation of their places of business (regardless of their nomenclature and/or the type of services provided thereat) should be after due consideration of all the factors including the possible inconveniences to its clientele.

It is essential that such a decision be appropriately appraised to the board for information with the reasons therefore, since the proposal for opening the branches/offices were initially approved by the board.

Adequate notice of a minimum of 2 months on the proposed relocation/closure should be given to policyholders serviced by that branch along with the alternate arrangements being made to service them.

Irda has also decided to standardise the classification of places of business adopted by various insurers and to compile a database of the offices of insurers. To achieve this objective, insurers are advised to classify their existing branch offices into Metro/Urban and Rural branches based on the classification provided by the latest decennial population census (Census of India).

The insurers are further asked to classify the details along with the postal address of the branch should be filed with the authority in hard/soft forms not later than February 28, 2007.