Chennai: The Insurance Regulatory Development Authority (IRDA) has started flexing its muscles. All the licensed insurance agents training academies have now been put on notice. The IRDA in recent times has begun inspecting the agent training institutes and those found violating norms or lacking the necessary infrastructure are being ordered to cease operations.
The latest institute that has fallen foul of IRDA is the IL&FS Education Services, Agra. The IRDA inspection team found the training centre lacking in mandatory facilities and has asked the institute not to take any fresh batches till its enquiry against the school is completed. A similar fate has overtaken the Lucknow-based Vision Insurance Academy and six centres of NIS Sparta Ltd and Taurus Institute of Insurance Training, Kanpur.
The six centres of NIS Sparta - run by franchisees and located in Kanpur, Agra, Meerut, Bhiwani, Haridwar and Lucknow - lacked the mandatory infrastructure facilities and library as required by the conditions of accreditation.
However, it is not just the agent training academies that have been asked to stop business; insurance broking houses, too, have received similar notices.
Recently IRDA had asked Avani Insurance Services Pvt Ltd to stop business since Avani has been taken over by Berger Paints India Ltd without prior intimation to IRDA, which was unable to assess the capability of the new shareholders to fulfill the conditions required to hold an insurance broking licence.
While these organisations have been asked to stop business till the completion of IRDA's enquiry, the regulator has also decided to suspend the composite broking licence of Corporate Risks India Private Ltd. This drastic action was due to the broker's improper conduct in relation to placement of reinsurance liability risk relating to Ranbaxy Laboratories Limited.
According to IRDA, the brokering company's explanation was not satisfactory and it believed that there was sufficient ground to believe that the insurance broker acted improperly on technical issues as also in matters relating to due diligence and truthful conduct of business.