A Corporate Agent acts on behalf of an insurance company in a market to aid them in selling their insurance products and services to its needful consumers. These authorized agents are hired by the insurance and/or reinsurance companies to market their insurance products to the customers in a much more personal and effective way. A corporate agent is licensed by the Insurance Regulatory and Development Authority of India (IRDAI) to operate as a legal entity in the insurance market.
The IRDAI, to ensure the smooth functioning of a corporate agent license, issues some regulations and restrictions that must be followed by each one of them. This article shares the well-defined codes of conduct that every corporate agent must adhere to.
Obligations in Corporate Agent License
- A licensed Corporate Agent must be responsible for all acts of omission and commission of its corporate insurance executive and every specified person.
- A licensed Corporate Agent must ensure that the corporate insurance executive and all specifie persons are properly train, skilled and knowledgeable in the insurance products they market.
- A licensed Corporate Agent must ensure that the corporate insurance executive and the specified person do not make to the prospect any misrepresentation of policy benefits and returns available under the policy.
- A licensed Corporate Agent must ensure that no prospect is forced to buy an insurance product.
- A licensed Corporate Agent must give adequate pre-sales and post-sales advice to the insure in respect of the insurance product.
- A licensed Corporate Agent must extend all possible help and cooperation to an insured in completing all formalities and documentation in the event of a claim.
- A licensed Corporate Agent must give due publicity that the corporate agent does not underwrite the risk or act as an insurer.
- A licensed Corporate Agent must enter into service level agreements with the insurer in which the duties and responsibilities of both are defin.
Further Guidelines for Corporate Agent License
- A licensed Corporate Agent must identify himself and the insurance company he represents.
- A licensed Corporate Agent must disclose his licence/ certificate to the prospect on demand;
- A licensed Corporate Agent must disseminate the requisite information regarding insurance products offered for sale by his insurer and consider the prospect’s needs while recommending a specific insurance plan.
- A licensed Corporate Agent must disclose the commission scales in respect of the insurance product offered for sale if asked by the prospect. Read More: Insurance Marketing Firm
- A licensed Corporate Agent must indicate the premium to be charge by the insurer for the insurance product offer for sale.
- A licensed Corporate Agent must explain to the prospect the nature of information required in the insurer’s proposal form and the importance of disclosing material information in purchasing an insurance contract.
- A licensed Corporate Agent must bring to the notice of the insurer any adverse habits or income inconsistency of the prospect, in the form of a report (called “Insurance Agent’s Confidential Report”) along with every proposal submitted to the insurer, and any material fact that may adversely affect the underwriting decision of the insurer as regards acceptance of the proposal, by making all reasonable enquiries about the prospect.
- A licensed Corporate Agent must promptly inform the prospect about the proposal’s acceptance or rejection by the insurer.
- A licensed Corporate Agent must obtain the requisite documents when filing the proposal form with the insurer and other documents subsequently asked for by the insurer to complete the proposal.
- A licensed Corporate Agent must render necessary assistance to the policyholders, claimants, or beneficiaries in complying with the insurer’s requirements for settlement of claims.
- A licensed Corporate Agent must advise every individual policyholder to effect nomination or assignment or change of address or exercise of options, as the case may be, and offer necessary assistance on this behalf, wherever necessary.
Restrictions in Corporate Agent License
- A licensed Corporate Agent must not solicit or procure insurance business without holding a valid licence/ certificate.
- A licensed Corporate Agent must not induce the prospect to omit any material information in the proposal form.
- A licensed Corporate Agent must not induce the prospect to submit wrong information in the proposal form or documents submitted to the insurer for acceptance of the proposal.
- A licensed Corporate Agent must not behave discourteous manner with the prospect.
- A licensed Corporate Agent must not interfere with any proposal introduced by any other specified person or insurance intermediary.
- A licensed Corporate Agent must not offer different rates, advantages, terms and conditions other than those offered by his insurer.
- A licensed Corporate Agent must not demand or receive a share of proceeds from the beneficiary under an insurance contract.
- A licensed Corporate Agent must not force a policyholder to terminate the existing policy and to effect a new proposal from him within three years from the date of such termination;
- No corporate agent shall have a portfolio of insurance business from one person or one organization, or one group of organizations under which the premium is more than fifty percent of the total premium procured in any year.
- A licensed Corporate Agent must not apply for a fresh licence to act as an insurance agent if the designated person earlier cancelled his license and a period of five years has not elapsed from the date of such cancellation.
- A licensed Corporate Agent must not become or remain a director of any insurance company.
To conserve the insurance business already procured through him, every corporate agent must attempt to ensure the premiums’ remittance within the stipulated time by giving notice to the policyholder orally and in writing. Read More: NBFC Registration
No company director or partner of a firm, chief executive, corporate insurance executive, or specified person shall hold a similar position with another corporate agent of any other insurance company.