Insurance companies can directly recruit agents; existing agents may not be required to pay license renewal fee.
IRDAI Chairman TS Vijayan today said that insurance agents need not obtain IRDAI license to carry out distribution business in India. He said this during the CII Insurance Summit held at Hyderabad.
In a report published in ‘Business Standard’, TS Vijayan, said, “Now the appointment of agents is given to the insurance companies. So the whole licensing system will go.” The new system pertaining to the appointment of insurance agents will come into effect from the next financial year, i.e. April 1, he added.
This also implies that existing agents may not be required to cough up a fee to renew their licenses. Currently, insurance agents need to pay a nominal fee of Rs. 125 every three years to renew their licenses.
“Though a person is still required to pass IRDAI examination, he/she need not procure license from IRDAI for distribution. Also, there would be no renewal fee for existing agents. This could benefit the industry which is struggling from high attrition,” said the senior official from a mid-sized private insurance firm.
A few months back, Vijayan had asked insurance companies to adequately compensate distributors. He had said that insurance intermediaries should be in a position to earn at least Rs. 10,000 per month from selling insurance policies.