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"The Insurance Regulatory and Development Authority has released a report on insurance broking on Wednesday.<br />\r\n<br />\r\nThe report analyses wide range of regulatory drivers for brokers and examines ways in which the broking industry can balance these new demands, while keeping an eye on creating positive value for enhanced performance.<br />\r\n<br />\r\nAccording to the report, the bank broking unit should have at least two persons with the requisite qualifications, mandatory theoretical and practical training and having passed the examinations required by the examining body.<br />\r\n<br />\r\n&quot;The remaining staff shall meet with the training requirements specified under clause...of the code of conduct, in addition to participating in relevant insurance seminars, workshops and continuing education programmes organised by the broking association and other stakeholders in the insurance sector,&quot; the report added.<br />\r\nBanks acting as brokers would enable use of the entire network of branches and increase insurance penetration.<br />\r\n<br />\r\nBank should have a board-approved policy to address issues with regard to conflict of interest between the bank and clients receiving banking services vis-a-vis insurance broking. The said policy would have to be filed with IRDA at the time of seeking an insurance broking license and the revised policy at the time of renewal, the report further said.<br />\r\n<br />\r\nBanks registered/licensed by RBI could be recognised as an entity to act as a direct insurance broker and be regulated by IRDA for their activities and functions specified in the IRDA Insurance Broking Regulation.<br />\r\n<br />\r\nThe banks will have to keep the following minimum deposit with IRDA‘s lien: Direct broker: Rs 50 lakh / reinsurance broker: Rs 2 crore / Composite broker: Rs 2.5 crore. <br />\r\nThe annual fees should be reduced to 0.4% of the preceding year's revenue. Further, the ceiling on business from a single client is proposed to be increased a flat 50%t for any single group. Business emanating from a government body or a public sector unit is excluded from this provision, the report added. <br />\r\n<br />\r\nWith regard to capital needs, the report has proposed a new clause on transfer of ownership. It has said the capital should not be pledged and effective ownership and control of the shares must rest with the entity/individual approved by the Authority. For the life insurance business, an additional bonus commission of five per cent of the first year's new business premium earned has been proposed.<br />\r\n<br />\r\nThe IRDA Committee has reviewed the evolution of the insurance brokers industry in India since the IRDA (Insurance Brokers) Regulations were passed in 2002, and compared it with models and performance of insurance brokers in other countries.<br />\r\nThe Committee has also interacted with various constituents of the industry to build a well-rounded view on changes needed to the 2002 regulations to unlock further value from the broker channel for the stakeholders in the next 10 years.<br />\r\nThe recommendations include modifications to existing clauses in the 2002 regulations, as well as new clauses that may be added to the same regulations.<br />\r\n<br />"
<https://www.indiainfoline.com/article/news-top-story/irda-releases-report-on-insurance-broking-113110805555_1.html>