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Insurance More teeth to insurance brokers

More teeth to insurance brokers

IRDAI proposes to allow insurance brokers to provide claims assistance to policyholders for claims up to Rs.10 crore.
Team Cafemutual Apr 4, 2017

Now, insurance brokers can charge a fee from policyholders as a claim consultation fee.

In its exposure draft on insurance broker regulation, IRDAI has proposed that insurance brokers to allowed to charge a fee from policyholders as a claim consultancy fee for the sum assured of up to Rs.10 crore.

In case the sum assured is over Rs.10 crore, the broker has to take prior approval of IRDAI before offering such consultancy services.

Brokers can charge a reasonable fee for such consultancy services based on their mutual agreement with clients. However, they cannot charge a fee based on percentage of sum assured.

Brokers cannot consult clients of other insurance brokers to ensure healthy competition. Instead, insurance brokers can consult clients who had bought policies through other distribution channel such as agents, banks and insurance website.

In addition, insurance broker has to obtain a written mandate from the client to represent them before the concerned insurance company.

Policyholders can also consult multiple insurance brokers for claim settlement, said IRDAI.

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