Referral companies' licences can be renewed: IRDA

India Infoline News Service | Mumbai |

Earlier IRDA rules had said that the approval granted by the Authority to the referral company is valid for three years from the date of grant of such approva

Insurance Regulatory and Development Authority (IRDA) on on 17 February 2014 said that the insurers can tie-up with referral companies for three years and it can later be renewed for another three years after approval by the regulator.
Earlier IRDA rules had said that the approval granted by the Authority to the referral company is valid for three years from the date of grant of such approval.
Now it has clarified that if there is mutual consent and the Referral Company is eligible to continue the referral arrangement with the Insurer in accordance to IRDA norms.
The renewal of the approval shall be subject to the following conditions:
i) The application seeking renewal of approval for the referral company shall be accompanied by a fee of Rupees Ten Thousand paid by way of a bank draft in favour of ‘Insurance Regulatory and Development Authority’ payable at Hyderabad.
ii) The application seeking renewal of approval in the prescribed form shall reach the office of the Authority three months prior to the expiry of the approval period. Provided, if the renewal application is not received as indicated above, the insurer shall forward the application stating the reasons for the delay, along with a penalty of Rupees two thousand rupees. Where the application seeking renewal of the approval is received after the expiry of the approval accorded by the Authority, the application shall carry a penalty of Rupees Five thousand rupees and the Insurer shall substantiate the reasons for the delay.
iii) Applications seeking the approval for renewal, one year after the expiry of the approval period are not considered for renewal.
iv) The Authority may call for such further information as may be required.
v) The Authority may reject the renewal application made, if it is found that the referral company is not fit to continue the referral arrangement with the Insurer.
vi) On satisfying itself that the renewal application is in order, the Authority may accord the renewal which shall be valid for a period of three years.
vii)On approval of the renewal, the insurer shall renew the registration of the referral company in accordance to the provisions of Regulation (8) of IRDA (Sharing of database for distribution of insurance products) Regulations, 2010.
viii) After the expiry of the renewal accorded, the Insurer shall follow the same procedure, for further renewal.
ix) The Insurer and the referral company shall continue to abide by all the provisions of IRDA (Sharing of database for distribution of insurance products) Regulations, 2010, Insurance Act, 1938 and all other applicable norms laid down by the Authority from time to time.


Annual Compliance Certificate
The referral company to maintain the specified net worth and turnover at all times during the tenure of the referral arrangement. All the Insurers are directed to upload in the portal / furnish the annual compliance certificate by the Chief Compliance Officer in Form – D of Annexure – 1 of this circular.
b) The compliance certificate for the preceding Financial Year shall be furnished to the Authority every year within fifteen days from the date of the receipt of the relevant information from the Referral Company but before 31st December.
Instances of application for Referral arrangement by one Insurer with an approved and/or a registered referral company of the other insurer for the same class of business.
All the Insurers shall notify the Authority the issuance of termination notice to the referral company or the receipt of the terminal notice issued by the Referral Company in terms of Regulation 11 (5) of the Regulations within 15 days of such event.
ii) The Insurer shall also notify the Authority any adverse information about the referral company that have come to its notice and may have a bearing on the Authority considering the company as a referral company to another insurer.
iii) No Insurer shall submit the ‘Application for Approval of the Referral Company’ with a ‘company’ which was already approved as a referral company for another insurer doing the same class of business until the expiry of three months from the date of termination notice issued or from the date of receipt of the termination notice issued by the Insurer.
 

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