Use our Portfolio Manager
 to generate:

    - Insurance Chart
    - Cash Flow Chart
    - Premium Calendar

  Insurance Counsellor
  Calculators
   Log in

   Need for Insurance
  Insurance & Tax
  Retirement Planning
  Insurance as Investment

Home / IRDA Update 

Rule book for brokers to be introduced by IRDA

The Insurance Regulatory and Development Authority has formulated a code of conduct for insurance brokers and prescribed strict penalties, including cancellation of licenses, for default and manipulation.

The code of conduct formulated by IRDA covers the entire gamut of activities, including relationship with clients, sales practices, duty to disclose information to clients, claims, advertising, sub-brokers and remuneration, among others.

This is the first time IRDA has made a draft report on insurance brokers. According to the report, an insurance broker would be granted license which would be valid for a period of three years.

It has stipulated that an insurance broker would face penalty of cancellation of license if he indulged in deliberate manipulation of policy conditions affecting the insurance market and the policy holders interest. A broker would also face cancellation if the financial position of the broker deteriorated to such an extent that his continuance as an insurance broker was not in the interest of policyholders. In case, an insurance broker is found guilty of fraud, or convicted of a criminal offence, the IRDA would cancel his license.

IRDA has confronted various issues related to working of insurance brokers in its draft report. For instance, the report covers validity of license, cancellation of license, code of conduct, advertising etc. According to code of conduct in draft report, insurance brokers must conduct their dealings with clients with integrity at all times, act with care and avoid conflicts of interest. The report said all insurance brokers would have to become members of the Insurance Brokers Association of India. They should ensure transparency and also explain the consequences of nondisclosures and inaccuracies to the prospective clients. On the advertising front, the report pointed out that insurance brokers would also be directed that statements made in advertising were not misleading or extravagant.

More Updates

| Back | Top | Home |