Nod For Insurance Forays In Eight Weeks

This means that the first two applicants for licences in the life insurance sector -- Dabur & Allstate and ICICI & Prudential -- will be able to set shops by end October.

"We think there will be a larger number of applications in the life insurance sector due to the life insurance business being a steady area in the long-term," Rangachary said.

He was addressing a seminar on the opening of the insurance sector in the city organised by the Jivan Vidya Trust and sponsored by Prudential and ICICI.

The IRDA chief also made it clear that on tax incentive front, there will be a level-playing field between the new players and the existing ones. For instance, the tax incentives received by a Mediclaim policy holder (of GIC) will be extended to new non-life insurance players.

 

Rangachary said an insurance agent can work both for life insurance as well as general insurance outfits provided he is attached to only one life and one general insurance company at a time.

In his keynote address, he spoke about the rules and regulations for the agents for the industry, which will be opening up soon. IRDA started accepting applications for insurance licences this week.

He spoke about different kinds of insurance agents and clarified the stand on issuing and renewal of licences for which an agent would have to go through tests. All new agents will be required to face the examination to get their licences.

"Our procedure would be simple and hopefully we would be able to issue the licence (to an agent) in a matter of seconds. The applicant would apply online on our website where we would make the form available.

This, along with his or her score, would be scrutinised by 100 divisional officers of Life Insurance Corporation of India (LIC) and forwarded to the IRDA. After comparing the examination results, we will issue the licence," he said.

"The commission payable to agents will have an upper ceiling of 15 per cent at most and the basic structure will not be altered with, at least temporarily," he said.

In reply to a question on whether foreign participants would be allowed a 100 per cent equity participation, he said, "That would entirely depend on the finance ministry."

Regulations with regards to the brokers (and whether there will be brokers in the life insurance segment at all) will be released by the end of this month as discussions are still underway, added the IRDA chairman.