Insurers to pay fine of upto Rs 1 crore on violations by agents, says Irda

The Insurance Regulatory and Development Authority of India (Irda) on Tuesday said an insurer will be responsible for all acts and omissions of its agents and will be liable to a penalty of up to Rs 1 crore.

Issuing guidelines for appointment of insurance agents, Irda said, "The insurer shall be responsible for all acts and omissions of its agents including violation of code of conduct specified under these guidelines, and shall be liable to a penalty which may extend to one crore rupees."

Further, any person who acts as an insurance agent in contravention of the provisions of norms would be liable to a penalty which may extend to Rs 10,000.

Also, "any insurer or any person acting on behalf of an insurer, who appoints any person as an insurance agent not permitted to act as such or transact any insurance business in India through any such person shall be liable to penalty which may extend to Rs 1 crore," the guidelines by the insurance regulator said.

According to the new norms, no person could act as an insurance agent for more than one life insurer, one general insurer, one health insurer and one of each of other mono-line insurers.

Irda also said there should be be a 'centralised list of agents' which contains all details of agents appointed by all insurers.

Listing out code of conduct, the insurance watchdog said where the agent represents more than one insurer offering same line of products,"he should dispassionately advice the policyholder on the products of all Insurers whom he is representing and the product best suited to the specific needs of the prospect".