The Insurance Regulatory Authority of India (Irda) has come out with guidelines with regard to group insurance policies. | |
| These guidelines, according to C S Rao, chairman of Irda, aim at streamlining the group insurance sector. |
| |
| "There have been issues with regard to disjointed groups calling themselves as groups to avail insurance. We have, therefore, defined what a group means to bring clarity in this sphere." |
| |
| The guidelines also define the remuneration that an agent or a broker needs to be paid for selling group insurance. |
| |
| According to these guidelines, a group shall comprise persons who assemble together with a commonality of purpose or for engaging in a common economic activity like employees of a company. |
| |
| Non-employer-employee groups may also be treated as groups provided the group organiser has the authority from majority of the group members to arrange insurance on their behalf or is doing so as part of a necessary security. |
| |
| Insurers using the services of corporate agents have been asked to require the latter to file certificates at least once a year from an independent auditor confirming compliance relating to collection and credit of premium as per Irda regulations. |
| |
| According to Rao, it was because there have been some cases wherein "some corporate agents should not have been selected to sell the insurance products." |
| |
| The premium charged and benefits admissable to members shall have to be clearly mentioned in the policy. |
| |
| The guidelines also say that group discounts on premium should not be appropriated as additional remuneration to the agent, corporate agent, broker or group organiser and should be passed on to the members. |
| |
| Besides, the commission being paid to the agent or corporate agent in respect to group insurance shall not exceed the percentage approved by the Irda or Insurance Act, 1938 and they shall not get any other payment whether as management expenses, documentation expenses or otherwise. |
| |
| The insurer shall also be responsible for the certificate of insurance issued by the group organiser or administrator and he/she will also remain responsible to ensure that all sales material and prospectus of the insurance plans are drawn in compliance with insurance regulations. |
| |
| They will also have to conduct surprise inspection of books and records of the group organiser and manager at least once in a year. |
| |
| They will be held responsible to the persons insured in case of failure of the organiser or manager to account for the business to the insurer, if the insured can prove that premium has been paid. |
| |
| These guidelines, according to Rao, have been introduced because "individuals within groups are not being served well in many cases." |
| |
|
| |
