IRDAI (Registration of Insurance Marketing Firm) (Amendment) Regulations, 2019

Jul 31, 2019 | by Avantis RegTech Legal Research Team

Industry Specific Compliance

The Insurance Regulatory and Development Authority (IRDAI) on July 24, 2019, notifies the Insurance Regulatory and Development Authority of India (Registration of Insurance Marketing Firm) (Amendment) Regulations, 2019 to further amend the Insurance Regulatory and Development Authority of India (Registration of Insurance Marketing Firm) Regulations, 2015. It will come into force on the date of its publication in the Official Gazette that is July 26, 2019. The main objective of these Regulations is to amend the IRDAI (Registration of Insurance Marketing Firm) Regulations, 2015 to provide an enabling environment to the Insurance Marketing Firms in order to help them achieve the objective of increasing insurance penetration in the country.

The amendments made in the IRDAI (Registration of Insurance Marketing Firm) Regulations, 2015 are:

 A new Regulation 2.3A has been inserted which talks about “Aspirational District” means a district designated as such by the NITI Aayog, Government of India or any other economically backward district, as may be recognized by the Authority.

 Regulation 3 which talks about the “Scope and applicability of these Regulations” has been substituted specifying “tie-ups with insurers”, the Insurance Marketing Firms (IMF) shall engage Insurance Sales Persons (ISP) for the purpose of soliciting and procuring insurance products of maximum of two Life insurers, two General insurers and two Health insurers at any point of time, under intimation to the Authority. The IMF shall intimate the Authority of any change in the engagement with insurers in the format specified by the Authority in this behalf.

It also specifies about products allowed for insurance marketing firms.

 The Regulation 6.1 has be substituted, specifying that the applicant shall have a net worth of: 

a)Not less than five lakh rupees, if the applicant is opting for only one district, which is an aspirational district. 

b)Not less than ten lakh rupees for all other cases.

 A new Regulation 7.6 has been inserted, specifying that on resignation or termination or death of the Principal Officer, the IMF shall endeavor to appoint a new Principal Officer at the earliest, and seek approval, within a period not exceeding 60 days, from the Authority. 

Provided that in the absence of a Principal Officer, a whole time director or managing partner or any other senior designated official of the Insurance Marketing Firm may, under intimation to the Authority, be authorized to act and perform the duties of the Principal Officer to meet regulatory compliance requirements only; and shall not solicit insurance business unless they have also undergone the training and passed the examination, and meet all the eligibility criteria of a Principal Officer. 

The request for change of Principal Officer shall be made in the format specified by the Authority in this behalf.

 Any applicant, aggrieved by the order of the Authority, may appeal to the Securities Appellate Tribunal. If the application is rejected and the applicant chooses not to appeal against the order of rejection of the application or in case Securities Appellate Tribunal rejects the appeal, the applicant may make a fresh application for issuance of certificate of registration after lapse of one year from effective date of such order of the Authority or the Securities Appellate Tribunal, as the case may be, for consideration by the Authority. The Authority may consider such application on merit.

 A new Regulation 27.3 has been inserted, specifying the “responsibilities of the insurers towards the Authority”-

(a) Every insurer shall file with the Authority, annually, a copy of the policy formulated by the company, for utilization of IMFs for penetration of insurance and in case of any changes made in the policy; it has to be submitted within 15 days of such change with reasons thereof. 

(b) Post issuance of the registration to an IMF, in case the insurer comes to know about any incidence of fraud or violation of code of conduct by the IMF, the insurer shall carry out detailed enquiry into such violation, and submit detailed confidential report to the Authority along with recommendations within 30 days.

 Schedule I, II, IV, V, VIII has been substituted. The Schedule X, 4(b) has been omitted. The amendments are also made in Form-A, Form B, Form C, Form AA (omitted) and Form D.

[Notification F. No. IRDAI/Reg/9/160/2019]


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