Partner Channels: Auto | Bill Pay | IT Education | Jobs | Lifestyle | Technology | Travel
May 8, 2001
|
|
|
|
|
|
||
|
Channels: Astrology | Broadband | Contests | E-cards | Money | Movies | Romance | Search | Wedding | Women Partner Channels: Auto | Bill Pay | IT Education | Jobs | Lifestyle | Technology | Travel |
||
|
|
||
|
Home >
Money > Business Headlines > Report May 8, 2001 |
Feedback
|
|
|
5% direct discount is violation of tariff regime: brokersBS Banking Bureau The Insurance Regulatory & Development Authority's decision to allow 5 per cent special discount on general insurance premium in lieu of agency commission where the insurance business comes directly from the corporate has come under flak from insurance intermediaries -- brokers and agents. Dubbing this as a violation of the tariff regime, they are taking up the issue with IRDA and the Tariff Advisory Committee since this practice directly hits the growth of the intermediaries. The brokers' association has written to the TAC questioning the ability of insurance companies to offer a special direct discount for direct business from corporates. "Since the TAC lays down the minimum cost of insurance cover for the insured, giving a 5 per cent discount is a violation of the tariff regime," said Fali Poncha, chairman of International Reinsurance and Insurance Consultancy Services. The directive that was issued by the General Insurance Corporation back in 1977, allowing a five per cent discount on premium, has been continued in the new liberalised insurance era. Despite the IRDA having structured a ceiling of 15 per cent on agency commissions in its regulations for agents, a new structure was proposed by the general insurance executive council in its meeting in March and approved by the regulator. The meeting of the eight CEOs of the general insurance companies was chaired by the IRDA member, H Ansari. "This discounting is a breach of tariffs," said Nitin Dossa, president of the General Insurance Agents Association of India. It also nullifies the need for an intermediary system, be it agents or brokers. The IRDA regulations that insist on 100-hour training overemphasis the need for professionalising the agent. Yet at the same time, the opportunities are remote when one considers that corporates can avail of a 5 per cent direct discount without having to pay for intermediary services , said Dossa. The growth of the insurance intermediary has already been hit as agency commissions have been sealed at five per cent for tariff based businesses. Tariff-businesses -- motor, fire, and engineering -- constitute as much as 70 per cent of the total general insurance market in the country. Powered by YOU MAY ALSO WANT TO READ:
|
||||
