The next time you plan to buy an insurance policy through a corporate agent, please check whether the agent is legally authorised to sell the policy or not. This has become necessary because the Insurance Regulatory and Development Authority has said that 4,261 corporate agents out of 7,000 in the country were not authorised to sell policies from March 31, 2010.
“These corporate agencies were due for renewal on or before March 31, 2010 but have not been renewed till date. All these agency licences have been withdrawn,” IRDA said in a circular on Tuesday.
Listing out all the agencies, it cautioned the insurers and general public not to transact any insurance business through them.
The exhaustive list contains many corporate agencies in all major cities and tier – II locations.
It included HDFC Bank (General Insurance), Oswal Consultancy, India Bulls Insurance Advisors Pvt Ltd in Mumbai; Prosoft Technologies and Tangent in Bangalore; Rishab Investments and Cosmos Financial Services in Chennai; Pact Brokerage and Atluri Travels in Hyderabad to name a few.
On the implication for a policy holder who bought the policy after March 31, 2010 till date, the official said their policies could still be valid.
“Non-validity of a policy might not be the implication. It means that they were purchasing the policies which were sold illegally. The full implications are being worked out,” he added.
BUSINESS TO BE HIT
As almost all life and general insurers including Life Insurance Corporation of India had engaged these agencies, the business is likely to be hit.
When contacted, a senior IRDA official said that both the insurer and the agent were liable for punishment if the polices are sold by those who did not renew their licences.
“We are in the process of verifying the quantum of business being done through these agents and which was done after March 31, 2010 illegally,” he said.
Insurance regulator IRDA sought to assure customers that their policies would remain valid despite the withdrawal of licences of over 4,200 corporate entities, including HDFC Bank, Indiabulls Insurance Advisors and Indian Overseas Bank.
At the same time, IRDA Chairman J Hari Narayan said that the licences of the corporate agents would not be renewed with retrospective effect. Out of the 7,000 agents,IRDA withdrew licences of 4,261 agents, as they failed to renew them by March 31 this year.
“The licences of the corporate agents will not be renewed with retrospective effect. The insurance policies will remain valid…The respective insurance companies will assign another agent,” Insurance Regulatory and Development Authority (IRDA) chief Hari Narayan said.
IRDA cancelled the licences of 4,261 corporate agents, after failed to renew their policies in time.
“The clients (insurance customers) should not do business with them (4,261 corporate agents). They have not applied for renewal of licences, so there licences currently stands cancelled,”IRDA chief said.
Besides HDFC Bank and the Indian Overseas Bank, other agents whose licences were not renewed by IRDA include Oswal Consultancy, India Bulls Insurance Advisors, Bharat Overseas Bank, Max Healthcare Institute, Indian Medical Association (Pune) and Edelweiss Capital.
While withdrawing the licences of corporate agents, IRDA had cautioned the public “not to transact any insurance business through them”.