India Inc has found a novel way to circumvent the ban on the 5 per cent direct discount on insurance premium. In nexus with some brokers, corporates are getting back a share of the brokerage/commission through various account heads.
Last month, the Insurance Regulatory and Development Authority (Irda) scrapped the practice of allowing corporates a 5 per cent discount on the premium if they approach the insurance company directly.
Only public sector undertakings are now allowed to directly approach the insurers and avail of the discount.
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Corporates, which pay over Rs 50-100 crore as annual premiums, will be hit as the direct discount reduces the premium outgo by Rs 2.5-5 crore.
Following the Irda ban, corporates are now using brokers as a means of convenience to