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.
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
