Measure intended to attract more advisors to insurance.
IRDA has reduced the passing mark for the pre-recruitment examination of insurance agents from 50 percent to 35 percent. However, some insurance advisors feel that the move may have adverse impact on quality of agents.
On one hand where IRDA has made the standard proposal form compulsory for insurance agents which requires subject specialization, the insurance regulator has on the other hand reduced the passing marks of qualifying exam which may impact the quality of insurance agents, said Chief Financial Planner of Max Secure Financial Planners Prakash Praharaj. He also said that quality of agents is more important than quantity of agents.
Instead of reducing the passing marks, the insurance regulator should increase the passing marks to 60 percent, says a Gujrat based insurance adviser Mukesh Patel. He said that the insurance sector needs well qualified and passionate insurance agents.
Nisreen Mamaji of Moneyworks Financial Advisors feels that the regulator has taken a regressive move. “Rather than focusing on theoretical knowledge, the regulator should focus on imparting practical knowledge like risk profiling, recommendation according to need etc to insurance agents. This may curb mis-selling of insurance products as well provide better knowledge to the agents.”
In a circular, IRDA said that it has been receiving representations from various stakeholders expressing the practical difficulties involved in recruitment of insurance agents.
IRDA
said “It has noticed that the number of candidates appearing for
pre-recruitment agent’s examination is gradually reducing for various
reasons.Among other reasons, the mandated higher bench mark of 50% marks is
identified as major reason which is contributing to reduction in agency force
in the country. Therefore, it has been decided to reduce the pass percentage
bench mark to 35%.”
IRDA’s last year annual report showed 10 percent decline in the number of insurance agents. Experts attributed this decline to revision in commission structure and customer disenchantment with insurance products.
