F.No. IRDA/Reg./ 10/2002.--In
exercise of the powers conferred by section 42 and section 42D and
clauses (k), (l), (m), (n), (o) and (p) of sub-section (2) of section
114A of the Insurance Act, 1938 (4 of 1938), the Authority, in
consultation with the Insurance Advisory Committee, hereby makes the
following regulations namely:-
1. Short title and commencement.--(1) These regulations may be called the Insurance Regulatory and Development Authority (Licensing of Corporate Agents) Regulations, 2002.
(2) They shall come into force on the date of their publication in the Official Gazette.
2. Definitions.-In these regulations,unless the context otherwise requires, -
(a) “Act” means the Insurance Act, 1938 (4 of 1938);
(b) “Approved Institution”
means an Institution engaged in education and/or training particularly
in the area of insurance sales, service and marketing, approved by the
Authority;
(c) “Authority”
means the Insurance Regulatory and Development Authority established
under the provisions of Section 3 of the Insurance Regulatory and
Development Authority Act, 1999 (41 of 1999);
(d) "Certification" means the process by which a Specified Person of the Corporate Agent,
who has successfully undergone practical training and passed the
required examination, is issued a Certificate entitling him to solicit
and procure insurance business on behalf of the Corporate Agent;
(e) “Composite Corporate Agent” means a Corporate Agent who holds a licence to act as an insurance agent for a life insurer and a general insurer;
(f) “Corporate Agent” means any person specified in clause (k) and licensed to act as such;
(g) “Corporate Insurance Executive”
in the case of a company or firm means, a director or a partner or one
or more of its officers or employees so designated by it, and in the
case of any other person, the chief executive, by whatever name called,
or one or more of his employees designated by him, who possesses the
requisite qualifications and practical training and who have passed such
an examination as required under clauses (e) and (f) of Section 42 of
the Act.
(h) “Designated person”
means an officer normally in charge of marketing operations, as
specified by an insurer, and authorised by the Authority to issue or
renew licences under these regulations;
(i) “Examination Body” means an Institution, which conducts pre-recruitment tests for insurance agents and which is duly recognised by the Authority;
(j) “Licence” means a certificate of licence to act as an insurance agent issued under these regulations;
(k) “Person” means
i. a firm; or
ii. a company formed under the Companies Act, 1956 (1 of 1956); or
iii. a banking company as defined in clause (4A) of section 2 of the Act; or
iv. a
corresponding new bank as defined under clause (d(a)) of sub-section
(1) of section 5 of the Banking Companies Act, 1949 (10 of 1949); or
v. a regional rural bank established under section 3 of the Regional Rural Banks Act, 1976 (21 of 1976); or
vi. a
co-operative society including a co-operative bank, registered under
the Co-operative Societies Act, 1912 or under any law for the
registration of co-operative societies; or
vii. a panchayat or a local authority; or
viii. a
Non-Governmental organisation or a micro lending finance organisation
covered under the Co-operative Societies Act, 1912 or a Non Banking
Financial Company registered with the Reserve Bank of India; or
ix. any other institution or organisation which on an application to the Authority is specifically approved by the Authority.
(l) “Practical training”
includes orientation, particularly in the area of insurance sales,
service and marketing, through training modules as approved by the
Authority;
(m) “Recognised Board or Institution” means such board or institution as may be recognised by any State Government or the Central Government;
(n) "Specified Person" means
a director or a partner or one or more of its officers or other
employees so designated by the corporate agent and, in the case of any
other person, the chief executive, by whatever name called, or one or
more of the employees designated by him, who has undergone the practical
training, examination, certification and who is responsible for
soliciting and procuring insurance business on behalf of the Corporate
Agent;
(2)
All words and expressions used herein and not defined but defined in
the Act, or in the Insurance Regulatory and Development Authority Act,
1999 (41 of 1999), or in any of the regulations made by the Authority
shall have the meanings respectively assigned to them in those Acts or
regulations.
3. Issue or renewal of licence. ---
(1) A person desiring to obtain or renew a licence (hereinafter
referred to as “the applicant”) to act as a corporate agent or a
composite corporate agent shall proceed as follows:-
(a) the applicant shall make an application to a designated person in Form IRDA-Corporate Agents-A-1:
Provided that the applicant, who desires to be a composite corporate agent, shall make two such separate applications.
(b) The fees payable by the applicant to the Authority shall be as specified in Regulation 7.
(2)
The designated person may, on receipt of the application along with the
evidence of payment of fees to the Authority, and on being satisfied
that the corporate insurance executive of the applicant:-
(i) possesses the qualifications as specified under Regulation 4;
(ii) possesses the practical training as specified under Regulation 5;
(iii) has passed the examination as specified under Regulation 6;
(iv) has furnished an application complete in all respects;
(v) has the requisite knowledge to solicit and procure insurance business; and
(vi) is capable of providing the necessary service to the policyholders;
grant or renew, as the case may be, a licence in Form IRDA-Corporate Agents-L-1:
Provided that the identity card shall be in Form IRDA- Corporate Agents-ID-1.
Provided
that a licence issued in accordance with this regulation shall entitle
the applicant to act as corporate insurance agent for one life insurer
or one general insurer or both, as the case may be.
Notwithstanding
anything contained in the above, the Authority may refuse or reject,
for reasons being recorded, an application if it feels that the grant of
licence may be against public interest or when the application is from
such a person or group of persons who is or are already engaged as
insurance agents, brokers, etc.
(3) The designated person shall grant or renew the licence within a period of 3 months from the date of application.
(4)
The designated person shall, if the consideration of the application is
likely to get delayed, within 60 days of the receipt of the application
inform the applicant the reasons for such a delay, and the likely time
it would take to do so.
(5)
If the designated person refuses to grant or renew a licence under this
regulation, he shall give the reasons thereof to the applicant.
(6)
An individual desiring to become a Specified Person of a corporate
agent/ composite corporate agent shall apply through the corporate
agent/ composite corporate agent in Form IRDA-Corporate Agent-A-2 to the
insurer.
(7)
The designated person of the insurer may, on receipt of such an
application along with the evidence of payment of fees to the Authority,
grant or renew, as the case may be, a certificate in Form
IRDA-Corporate Agents-L-2:
(8) The fees payable by the applicant to the Authority shall be as specified in Regulation 7.
4. Qualifications. ---
(1) The applicant being a corporate agent shall ensure that depending
upon the nature of the entity, the Partnership Deed, Memorandum of
Association or any other document evidencing the constitution of the
entity shall contain as one of its main objects soliciting or procuring
insurance business as a Corporate Agent.
(2)
The corporate insurance executive shall possess the minimum
qualification of a pass in 12th Standard or equivalent examination
conducted by any recognised Board/Institution, where the applicant
resides in a place with a population of five thousand or more as per the
last census, and a pass in 10th Standard or equivalent examination from
a recognised Board/ Institution if the applicant resides in any other
place.
(3) A specified person shall possess the minimum qualifications stipulated in sub-regulation (2) above.
(4)
Every corporate insurance executive and each of the specified persons
shall also not suffer from any of the disqualifications specified under
Section 42D of the Act.
5. Practical Training. --- (1)
Where an applicant is seeking licence for the first time to act as a
corporate agent, a corporate insurance executive of such an applicant
shall have completed from an approved institution, at least, one hundred
hours’ practical training which may be spread over three to four weeks,
in either life or general insurance business, as the case may be.
Provided
that the corporate insurance executive of the applicant shall have
completed from an approved institution, at least, one hundred fifty
hours’ practical training which may be spread over six to eight weeks
both in life and general insurance business, where such an applicant is
seeking licence for the first time to act as a composite corporate
agent.
(2) Where the corporate insurance executive of the applicant, referred to under sub-regulation (1), is---
(a) an Associate/Fellow of the Insurance Institute of India, Mumbai;
(b) an Associate/Fellow of the Institute of Chartered Accountants of India, New Delhi;
(c) an Associate/Fellow of the Institute of Costs and Works Accountants of India, Calcutta;
(d) an Associate/Fellow of the Institute of Company Secretaries of India, New Delhi;
(e) an Associate/Fellow of the Actuarial Society of India, Mumbai;
(f) a
Master of Business Administration of any Institution/ University
recognised by any State Government or the Central Government; or
(g) possessing Certified Associateship of Indian Institute of Bankers (CAIIB); or
(h) possessing
any professional qualification in marketing from any Institution/
University recognised by any State Government or the Central
Government--
he shall have completed, at least, fifty hours’ practical training from an approved institution.
Provided
that such corporate insurance executive of the applicant shall have
completed from an approved institution, at least, seventy hours’
practical training in life and general insurance business, where such
applicant is seeking licence for the first time to act as a composite
corporate agent.
(3)
A Specified Person shall undergo a practical training of not less than
100 hours in life or general insurance business, as the case may be,
from an approved institution. In case of training in both life and
general insurance, the duration of practical training shall be not less
than 150 hours. However, if he falls within one of the categories as
given in sub-regulation (2) above, he shall have completed fifty hours
from an approved institution.
Provided
that such a specified person of the corporate agent shall have
completed from an approved institution, at least, seventy hours’
practical training in life and general insurance business, where such
specified person of the corporate agent is seeking certificate for the
first time which will enable him to procure both life and general
insurance business.
6. Examination.—
(1) The corporate insurance executive of the applicant or a specified
person shall have passed the pre-recruitment examination in life or
general insurance business, or both, as the case may be, conducted by
the Insurance Institute of India, Mumbai, or any other examination body
duly recognised by the Authority.
2)
The examining body shall issue a certificate to every successful
specified person, which shall enable him to procure insurance business
on behalf of the corporate agent he is working for.
7. Fees payable.-- (1)
The fees payable to the Authority for issue or renewal of licence to
act as a corporate agentshall be rupees two hundred and fifty.
(2)
Every specified person of the corporate agent shall, apply through the
corporate agent to the designated person of the insurer to obtain the
certificate, accompanied by a fees of rupees five hundredremitted to the
Authority.
8. Remuneration:
1) Every Corporate Agent shall be paid a commission as per provisions of Section 40 A of the Act.
2) Every specified person shall be an employee of the corporate agent.
9. Code of Conduct.----
1) Every Licensed Corporate Agent shall abide by the code of conduct specified below:
Every corporate agent shall:
a) be responsible for all acts of omission and commission of its corporate insurance executive and every specified person;
b) ensure that the corporate
insurance executive and all specified persons are properly trained,
skilled and knowledgeable in the insurance products they market;
c) ensure
that the corporate insurance executive and the specified person do not
make to the prospect any misrepresentation on policy benefits and
returns available under the policy;
d) ensure that no prospect is forced to buy an insurance product;
e) give adequate pre-sales and post-sales advice to the insured in respect of the insurance product;
f) extend
all possible help and cooperation to an insured in completion of all
formalities and documentation in the event of a claim;
g) give due publicity to the fact that the corporate agent does not underwrite the risk or act as an insurer;
h) enter into service level agreements with the insurer in which the duties and responsibilities of both are defined.
2) Every corporate agent or a corporate insurance executive or a specified person shall also follow the code of conduct specified below:
(i) Every corporate agent/ corporate insurance executive/ specified person shall,---
(a) identify himself and the insurance company of whom he is a representative;
(b) disclose his licence/ certificate to the prospect on demand;
(c) disseminate
the requisite information in respect of insurance products offered for
sale by his insurer and take into account the needs of the prospect
while recommending a specific insurance plan;
(d) disclose the scales of commission in respect of the insurance product offered for sale, if asked by the prospect;
(e) indicate the premium to be charged by the insurer for the insurance product offered for sale;
(f) explain
to the prospect the nature of information required in the proposal form
by the insurer, and also the importance of disclosure of material
information in the purchase of an insurance contract;
(g) bring
to the notice of the insurer any adverse habits or income inconsistency
of the prospect, in the form of a report (called “Insurance Agent’s
Confidential Report”) along with every proposal submitted to the
insurer, and any material fact that may adversely affect the
underwriting decision of the insurer as regards acceptance of the
proposal, by making all reasonable enquiries about the prospect;
(h) inform promptly the prospect about the acceptance or rejection of the proposal by the insurer;
(i) obtain
the requisite documents at the time of filing the proposal form with
the insurer; and other documents subsequently asked for by the insurer
for completion of the proposal;
(j) render
necessary assistance to the policyholders or claimants or beneficiaries
in complying with the requirements for settlement of claims by the
insurer;
(k) advise
every individual policyholder to effect nomination or assignment or
change of address or exercise of options, as the case may be, and offer
necessary assistance in this behalf, wherever necessary;
(ii) No corporate agent/ corporate insurance executive/ specified person shall,----
(a) solicit or procure insurance business without holding a valid licence/ certificate;
(b) induce the prospect to omit any material information in the proposal form;
(c) induce
the prospect to submit wrong information in the proposal form or
documents submitted to the insurer for acceptance of the proposal;
(d) behave in a discourteous manner with the prospect;
(e) interfere with any proposal introduced by any other specified person or any insurance intermediary;
(f) offer different rates, advantages, terms and conditions other than those offered by his insurer;
(g) demand or receive a share of proceeds from the beneficiary under an insurance contract;
(h) force
a policyholder to terminate the existing policy and to effect a new
proposal from him within three years from the date of such termination;
(i) No
corporate agent shall have a portfolio of insurance business from one
person or one organization or one group of organizations under which the
premium is in excess of fifty percent of total premium procured in any
year;
(j) apply
for fresh licence to act as an insurance agent, if his licence was
earlier cancelled by the designated person, and a period of five years
has not elapsed from the date of such cancellation;
(k) become or remain a director of any insurance company;
(iii)
Every corporate agent shall, with a view to conserve the insurance
business already procured through him, make every attempt to ensure
remittance of the premiums by the policyholders within the stipulated
time, by giving notice to the policyholder orally and in writing.
(iv)
No director of a company or a partner of a firm or the chief executive
or a corporate insurance executive or a specified person shall hold
similar position with another corporate agent of any other insurance
company.
10. Renewal of Licence: (1)
Every licence granted by the Authority to a corporate agent or any
renewal thereof, in terms of these regulations, shall remain in force
for three years.
(2)
A licence granted to a corporate agent may be renewed for a further
period of three years on submission of the application form along-with a
renewal fee of rupees two hundred and fifty, at least thirty days prior
to the date of expiry of the licence.
(3)
The additional fees payable to the Authority, under the circumstances
mentioned in sub-section (3) of section 42 of the Act, shall be rupees
one hundred.
(4) The
Authority may, if it is satisfied that undue hardship would be caused
otherwise, accept any application after the licence ceased to remain in
force, on the payment by the applicant of a payment of rupees seven
hundred and fifty as additional fee.
(5)
Every certificate granted to the specified person shall remain in force
for a period of three years which can be renewed for a further period
of three years on submission of an application form accompanied by fees
of rupees one hundred, provided that the licence of the corporate agent
continues to be valid. The application form along-with the fees shall be
submitted at least thirty days prior to the date of expiry.
(6)
The specified person on his ceasing to be an employee of the corporate
agent shall surrender his certificate to the designated person. If he
desires to become an individual insurance agent then he shall follow the
procedure as laid down in Insurance Regulatory and Development
Authority’s (Licensing of Insurance Agents) Regulations, 2000. Such a
person need not go through a further process of training and pass at the
examination within the period of licence granted to them.
(7) A specified person will also be governed by the provisions of sub-regulation (3) and (4) stated above.
(8)Every corporate insurance executive or the specified person of the corporate agent, shall
have completed at least twenty-five hours’ practical training in life
or general insurance business, as the case may be, from an approved
institution, for the purposes of renewal of licence to the corporate
agent and/or renewal of certificate to the specified person.
Provided
that such applicant before seeking renewal of licence or certificate to
act as a composite insurance agent shall have completed from an
approved institution, at least, fifty hours’ practical training in life
and general insurance business
11. Cancellation of licence/ certificate.--- The
designated person may cancel a licence or a certificate of a corporate
agent or a specified person, if such a corporate agent or the corporate
insurance executive or the specified person suffers, at any time during
the currency of the licence, from any of the disqualifications mentioned
in sub-section (4) of section 42D of the Act and recover from him the
licence or certificate granted to him.
12. Issue of duplicate licence.---The
Authority may on payment of a fee of rupees fifty issue a duplicate
licence to replace a licence, which is lost, destroyed, or mutilated.
13. Non-application to existing insurance agents.
--- (1) A corporate agent who has been issued a corporate agent licence
prior to the commencement of these regulations shall exercise the
option of either continuing with the existing licence till the expiry of
the licence so granted or surrender the existing licence and apply for a
new licence in terms of regulation 3.
(2)
A Person holding an individual insurance agent’s licence who wishes to
become a corporate agent shall surrender the individual licence and
apply afresh as per regulation 3.
14. Miscellaneous.---
Every corporate agent shall maintain a register which shall contain the
name, address, telephone no, photograph, date of commencement of
employment, date of leaving the service, if any, salary paid to the
specified person.
