New corporate agency guidelines evokes mixed reactions from life insurers

Venkatachari Jagannathan
08 August 2005

Chennai: After stopping issuing corporate agency license several months ago, the Insurance Regulatory and Development Authority (IRDA) has come out with its guidelines for corporate agents. The ban on licensing new corporate agents had affected several private life insurers.

According to P Nandagopal, senior vice president, Alternate Channels and Group Life, "In a overall sense, the new guidelines bring some discipline into the system."

But those in the industry have expressed some reservations. "The requirement of educational / professional qualifications for corporate agents is not very appropriate considering experience in itself is a good source of education and the IRDA exam anyway tests their knowledge. If IRDA wants it can further tighten the exam standards," says an official of a private life insurer.

According to an executive from MetLife Insurance Company Private Limited, the insurers will incur additional expenditure if it has to monitor the compliance of its corporate agents.

Welcoming the decision to permit only insurance qualified persons to man the corporate agency, the MetLife executive added that the start up capital of Rs15 lakh, appeared high and would restrict the small professional players from entering the business.

Here an official of Life Insurance Corporation of India is in agreement with IRDA. According to him, only new companies will be required to satisfy the capital norms. "For serious players, the minimum start up capital will not be a deterrent."