Your insurance premium payments will now become more secure as the insurers will have to deploy only registered agents/intermediaries for premium collection.

Further, they will be accountable for the receipts issued by the authorised agents/intermediaries, according to the Insurance Regulatory and Development Authority (IRDA).

In guidelines on outsourcing for insurers, issued on Tuesday, Mr A Giridhar, Executive Director, IRDA, prohibited insurers from outsourcing ‘core activities' to safeguard the interests of policy holders.

The regulator had classified all activities relating to underwriting (product, design, actuarial functions and enterprise wide risk management), accounting and net asset value calculations and grievance redressal, among others.

However, the regulator has allowed outsourcing non-core activities such as internal audit, claim-processing for overseas insurance contracts, human resource services, data entry and reminders for premium, among others.

“The insurer shall ensure that outsourcing arrangements neither diminish its ability to fulfil its obligations to Policyholders nor impede effective supervision by IRDA,” Mr Giridhar said.

The insurers have to take steps to ensure that the service provider employs the same standards in performing the services as would be employed by them if the activities were conducted in-house.

“Accordingly, insurers should not engage in outsourcing that would result in their internal control, business conduct or reputation being compromised or weakened,” he added.

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