IRDA extends client retention norms to corporate agents
26 Nov 2011
The Insurance Regulatory and Development Authority today published guidelines for 'persistency ratio', under which it becomes mandatory for corporate agents in the life insurance sector to retain at least 50 per cent of their clients.
The guidelines would be effective from 1 July 2014.
Extending the guidelines already in place for individual agents to the corporate agents, the IRDA circular said, "The stipulated persistency rate requirements will be effective for all corporate agency renewals that are due from 1 July 2014."
For computing the persistency ratio, the policies which continue to provide insurance cover to clients after the end of premium payment (auto cover policies) can be included.
However, the policies which have already matured, or wherein death or surrender has happened, would be exempted from calculating persistency ratio for the agent.
Further, employees of both life and general insurance companies cannot engage their relatives as corporate agents.
The term relative in this case is defined as spouse, sisters, brothers, parents, sons, daughters-in-law, daughters and sons-in-law, besides spouse, dependent children or dependent step children whether residing with the employee or not.
