The Insurance Regulatory and Development Authority (Irda) has set up a committee to consider sub-broking in insurance. A total of 11 members with representatives from the life insurance council, the general insurance council and Irda have been made part of the committee.
P C James, chair professor from National Insurance Academy, and two members from Insurance Brokers Association of India are also part of this committee. In order to increase insurance penetration in semi urban and rural areas, Irda observed that the presence of intermediaries is essential.
"The issue of sub-broking is under consideration of the authority for quite some time. After considerable deliberations on the issue of sub-broking, it has been decided to constitute a committee to examine various issues relating to sub-broking and submit their report to the authority for consideration," said Irda in a notification.
The committee would consider introducing a retail broking system in the insurance space in India. It would also look into the manner in which the retail broking system could operate as sub-brokers and together with insurance brokers.
Also, the committee would consider and recommend the draft agreement that should be entered into between the brokers and retail sub-brokers if such is the recommendation.
The committee would submit its report by January 31, 2013.