In its latest frequently asked questions (FAQs) for insurance agents and intermediaries, IRDAI has addressed the process of switching insurance companies.
Currently, insurance agents are allowed to tie-up with one life insurer, one non-life insurance company and one standalone health insurer. However, agents can switch their insurance company by following these steps.
- You first need to surrender your agency license with the existing insurance company and return the appointment letter and identity card issued by the current insurer
- After submitting these documents, you will receive a cessation certificate (a kind of relieving letter). IRDAI norms direct insurance companies to issue cessation certificates to agents within 15 days of the date of application
- Once you get the cessation certificate, you can apply for fresh appointment with another insurer. You will have to furnish details of your previous agency and the cessation certificate
- However, the new insurer will issue fresh appointment only after a cooling period i.e. 90 days from the date of issuance of cessation certificate by the previous insurer
- Please note, you cannot sell policies during the cooling period
Further, IRDAI has clarified that the insurance regulator does not maintain the details of remuneration of agents on its agent database. “The regulator is neither statutorily required to collect the details of income, commission or benefits gained by an agent nor filed by the regulated entities periodically. As such, no data is available with the regulator,” said IRDAI.
Meanwhile, in the FAQ, the insurance regulator has also clarified the insurance companies will have to incentivize their distributors within the prescribed commission structure.
