There is a hot pursuit for employees of the Life Insurance Corporation of India from the insurance broker industry.
According to the Insurance Regulatory and Development Authority norms, for a broker to get a broking licence, the entity must employ an experienced person -- the cadre of a manager -- who has dealt with underwriting and claims handling.
Today majority of the insurance brokers are in the business of non-life insurance and reinsurance broking. Few have gone in for life insurance broking.
IRDA insists that brokers have an in-house personnel with underwriting experience and that of handling claims follows the possibility of the regulator at a future date, permitting brokers to settle claims, said Hiralal Chopra, chief advisor, Edelweiss Capital.
"Since LIC never had a voluntary retirement scheme in the past, it has become an impossible task to get an ex-manger from LIC," said Chopra.
Edelweiss Capital has already commenced non-life broking business as Chopra, who was earlier with New India Assurance Company in the capacity of general manager, has experience in handling claims.
Today the entity wishes to expand into the life insurance broking but is seeking to recruit an existing or former LIC employee.
Ritu Nanda, heading the leading life insurance broking house in the country, has picked up nine former executive directors of LIC. Since the insurance sector opened up in December 2000, over 100 LIC employees quit from the corporation.
Majority were from the marketing, actuarial and IT side. About 10 LIC underwriters have also been recruited by the private sector.
With brokers offering about a monthly salary of Rs 25,000-30,000, as opposed to private life insurance companies enticing them with Rs 400,000-500,000 packages, most LIC employees are more enticed to join private insurance companies.
"Private insurance players are offering double the salary today than the Rs 200,000-odd salary an LIC manager earns," said LIC officials.
"There's preference for LIC employees to join insurance companies as brokers are considered unreliable in the sense that some have off late shut shop," said a former LIC employee, now working with one of the leading life insurance company.
Though the IRDA has issued over 2,000 broking licences, about 25 have already closed down due to the lack of business viability.
