The Hindu Business Line : IRDA sets time-bar on new branches

OBSERVING that some of the insurance companies were taking an unduly long time to open new places of business even after obtaining the approvals from the regulator, the Insurance Regulatory and Development Authority (IRDA) has decided to fix a timeframe for insurers to open branches from the date of obtaining approvals.

At present, the in-principle approval of IRDA to insurance companies in respect of opening of new places of business does not prescribe a time limit for the actual opening of offices.

In a communique to insurance companies here on Friday, the IRDA Member, Mr C.R. Muralidharan, said since some of the insurance companies take an unduly long time to open branches even after obtaining approvalsthe objective of expeditiou opening of branch offices to provide better reach to the customer was defeated.

"It has, therefore, been decided that effective from January 1, 2006, new places of business should be opened within a period of one year from the date of approval letter from the Authority and after the expiry of the time limit, insurers have to apply afresh," he informed the insurance companies.

Further, the IRDA member also advised the insurers to review the existing position in respect of the branches/offices where in-principle approval of IRDA was granted but the offices have not been opened for more than one year thereafter and furnish the details.

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