India's insurance regulator has been advised by a select committee of the Rajya Sabha to examine and frame guidelines for allowing multiple corporate agencies (MCAs) to represent more than two insurers.
The select committee on the Insurance Laws (Amendment) Bill also categorically said that insurers cannot absolve themselves of the acts of omission and commission of their agents.
The report of the select committee, headed by the BJP's Chandan Mitra, was tabled in the Rajya Sabha Wednesday.
The committee has advised the Insurance Regulatory and Development Authority (IRDA) to "frame appropriate guidelines in consultation with the stakeholders, especially as regards allowing an MCA to operate for more than two Insurance Companies (both life and non-life)."
Under the existing corporate agency regulations a corporate agent can represent only one life/general and health insurer.
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It was suggested to the committee that the existing norms may be revised and the proposed MCAs may be allowed to operate simultaneously at least for ten insurers (both life and non-life) for development of the business by the insurers across the country.
It was also suggested that the start up capital for MCA be raised to Rs.10 crore from Rs.15 lakh to keep away fly-by-night operators.
The committee also favoured IRDA being given the flexibility to prescribe the broad architecture for determination of the expenses of an insurer in any financial year as regards the remuneration to their agents/intermediaries.
The committee also recommends that adequate protective mechanism may also be instituted by IRDA to ensure that the due commission to the agents against business done is protected through regulations and their commission structure should be determined by IRDA depending on market conditions.
