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Home / IRDA Update 

IRDA plans to ban poaching of Insurance agents

The Insurance Regulatory and Development Authority (IRDA) is planning to ban insurance companies from poaching each other's agents once the industry is opened up to the private sector. The move is seen as beneficial to the life insurance cooperation, which has the country's largest agency network as of now the most to lose from the entry of private players. 

According to the IRDA'S draft guidelines, an insurer (both life and non- life) cannot appoint a person as an agent who has been working as insurance agent for another company. 

An insurance agent who holds a valid certificate of license and has been appointed by an insurance company, shall, for all intents and purposes, be an insurance agent for that insurance company only. 

LIC currently has a strong agency workforce of over six lakhs . The guidelines do not affect the general insurance companies so much because, by and large, they do not employ agents for transacting business. Agency arrangements, if any, have tended to be informal.

In the case of a company, firm, registered society, any director can qualify as an insurance agent by writing the exam and undergoing the requisite training. Agents have to ensure that all the possible steps for the delivery of the policy bond from the insurer to the customer are taken within 45 days of the date of proposal.

However, the IRDA has made the insurer and not the agent ultimately responsible for the delivery of the delivery of the policy documents.

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