The Hindu Business Line : IRDA to revoke suspension on Corporate Risk India

TAKING note of the submissions made by Corporate Risk India Pvt Ltd (CRIPL), the New Delhi-based insurance broker, in a personal hearing held recently, the Insurance Regulatory and Development Authority (IRDA) has decided to revoke the suspension imposed on the broking company.

However, stipulating certain conditions, the insurance regulator said the revocation of suspension would come into effect from November 15 subject to the condition that the company files a report with the regulator after adhering to the conditions stipulated.

According to the IRDA Chairman, Mr C.S. Rao, the company should appoint a person with working experience of reinsurance business as head of the reinsurance broking section.

The bio-data of the person appointed to this position should also be filed with IRDA and no-objection confirmation should be obtained.

The Corporate Risk India management was also asked to document the procedures manual and forms to be used for reinsurance broking business including the delegation of authority within the company for various functions.

Apart from following the regulations and the code of conduct already prescribed for the brokers under the regulations, the company was asked to comply with additional conditions for undertaking reinsurance broking after receiving clearance fromIRDA for resuming the business.

According to IRDA, the company should undertake reinsurance broking only upon the instruction of an insurer providing the direct insurance cover or quoting for the insurance cover of a client.

The insurance broker should keep the direct broking and reinsurance broking of the same client distinctly separate and should not put up terms to the direct client based on reinsurance quotes but only quote terms provided by the direct insurer.

The CRIPL management was directed to report to the insurer the terms obtained for reinsurance as originally received without any modifications.

The cover note provided to the insurer for reinsurance should be a total true reproduction of the terms at which reinsurance has been placed including the names and shares of reinsurers.

CRIPL was also asked to furnish to the insurer a true copy of the placement slip signed by the leading reinsurer quoting terms, indicating thereon, the signed line of the reinsurer.

Further, IRDA has directed it to file with the regulator monthly reports on the reinsurance risks handled giving the particulars of risks handled, the date of commencement of the direct risk, date of instruction to place reinsurance, date of completion of placement of reinsurance and the date of issue of cover note.

In no case should the cover note be delayed for more than three working days after placement of reinsurance was completed. The monthly reports should be sent to IRDA within a week of the end of the month.

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