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IRDAI has been exploring whether it should discontinue services of Motor Insurance Service Providers (MISPs). In fact, IRDAI has constituted a working committee which will review the case for discontinuation of MISPs.
MISPs are essentially automobile dealers who sell long term motor insurance policies at the time of selling cars or two wheelers. This has put agents and other intermediaries at a disadvantage as they can expect only people (even their existing clients in other line of business) to renew motor insurance through them.
In addition, MISPs command higher brokerage compared to agents and brokers currently. But there has been a proposal to bring uniformity in commission structure of all intermediaries.
Further, the 15-member working committee headed by Bhargav Dasgupta, MD and CEO, ICICI Lombard General will review if IRDAI should discontinue tariffs in fire, engineering and motor own damage.
The committee will also suggest business model for freedom of choice in motor insurance products especially with regard to purchase of new motor vehicles.
The group is expected to submit its report within 3 weeks.
