IRDAI to adopt graded approach for violations by brokers

Move by regulator is aimed at simplifying application of penalties in case of non-compliance or violations

The Insurance Regulatory and Development Authority of India (IRDAI), in its norms on non-compliance by brokers, said that there would be a graded approach to any violation.

The step is taken to simplify the application of penalties in case of non-compliance or violation of regulations, the regulator said. 

In case of non-compliance for the first time, IRDAI said that generally a warning would be given. 

Further, it said, brokers will not undertake placement of new business till the time the problem is rectified or for two or four months, whichever is later, if there is a non-compliance issue for the second time.

 

In case of non-compliance for the third time, the regulator will initiate steps for suspension or cancellation of the license with the condition that the broker will not undertake placement of new business till such time the problem is rectified or six months, whichever is later. 

The IRDAI has also put greater onus on the principal officer to ensure compliance as he will be held personally responsible along with the compliance officer.