IRDA ALLOWS CORPORATES TO OWN BOTH BROKING AND INSURANCE ARMS

India’s Regulatory and Development Authority (Irda) is to relax its laws surrounding corporates that own a general insurer, allowing them to also launch insurance broking businesses. Irda has though placed a number of conditions on this arrangement meaning that corporates will have to give an undertaking that customers will not be coerced into using the broker and that the broker will not receive any preferential treatment from affiliated insurers through higher remuneration and commissions; favourable terms and conditions; or exclusive product promotions. Irda also stipulated that any related transactions must be clearly audited and that the broker “must ensure that not more than 25% of the insurance handled by it within the financial year is placed with the insurance company within the promoter group”.