Firms May Set Up Dummy Insurance Brokerages
The introduction of insurance brokers may set the stage for top corporate houses to set up captive, dummy insurance broking firms. This will be with a view to corner a portion of the premium they pay to insurance companies by way of brokerage commission.
Reliance Industries, Tatas, Birla group, Essar group and Larsen & Toubro are among the highest premium paying corporates. The Essar group pay an annual premium of around Rs 50 crore to cover its plant, machinery and property among others.