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Sunday, Dec 15, 2002

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IRDA favours long-term players in broking

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THE Insurance Regulatory and Development Authority (IRDA) has favoured the entry of long-term players into the insurance broking sector, keeping in view the sustainable growth of the insurance industry in the country.

It was with this objective that the regulator had stipulated the high minimum capital requirement of Rs 50 lakh for the brokers' licence, the IRDA Chairman, Mr N. Rangachary, told industrialists and members of the Federation of Andhra Pradesh Chambers of Commerce and Industry (FAPCCI) here on Saturday.

Responding to suggestions by FAPCCI members to scale down the minimum capital requirement for brokers' licence, Mr Rangachary said the high-entry barriers would encourage only the long-term players and it was in the interest of the policyholders.

Stating that the regulator has received over 25 applications for brokers' licence, he said most of them were from qualified professionals such as chartered accountants and MBAs. While a couple of them were expected to begin operations shortly in an informal way, Mr Rangachary said the first licence would be formally issued by January 15.

The FAPCCI Chairman, Mr Omprakash Tibrewala, suggested that the regulator should provide the option to the policyholder under the new policy framework to change his agent, citing the cases of policies lapsing due to lack of service from the agents.

The Chairman of FAPCCI Committee on banking, insurance and finance, Mr K. Jaya Prakash Ram, asked the IRDA to consider exempting the insurance brokers with experience of 10 to 15 years from appearing for the brokers' examination.

According to the Regional Manager of Cholamandalam General Insurance, Mr A. Murali Mukund, foolproof systems of control and measures need to be developed for the success of the insurance broker system in the country.

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