IRDAI has issued a circular in which it has directed insurance marketing firms (IMFs) to take approval of Life Insurance Council (LIC) and General Insurance Council (GIC) on resignation of their sales representatives i.e. insurance sales persons (ISPs).
IMFs follow open architecture distribution model in which intermediaries can have tie ups with at least two life, two non-life and two standalone health insurers. IMFs can offer a wider choice to their clients. In addition, they can sell other financial products like mutual funds and pension products. IMFs can appoint ISPs to provide sales and services to clients.
The IRDAI circular specifies that IMFs have to forward the resignation letter submitted by the ISP along with the registration certificate to Life Insurance Council or General Insurance Council, as applicable. The council will then forward the resignation requests of the ISP to the concerned three-member committee that would include members from both the insurance councils. The committee would communicate their decision to the IMF.
IRDAI has also segregated vicinity of insurance councils depending on geographical presence. This means, if Maharashtra comes under life insurance council, intermediaries in Mumbai will have to report to life insurance council.