Indian Insurance sector regulator IRDA (Insurance Regulatory and Development Authority) has proposed to make it mandatory for insurers, who have been in business for 10 years, to open at least 25% of new offices in areas that have a population less than 1,00,000 (One Lakh).
IRDA has proposed in its draft exposure on Insurance Regulatory and Development Authority (Places of Business) Regulations, 2012.
“An insurer that has completed ten years of business is proposed to be mandated to open at least 25% of new places of business in places where population is not more than 1,00,000. The proposed regulations have been made to help increase the penetration of the sector in rural and semiurban areas"
The existing regulatory approach of requiring insurers to follow certain requirements while opening / closing / relocating various places of business deserves to be strengthened.
IRDA said an insurer having solvency ratio of 1.5 & expenses of management within the extant limits in the preceding three financial years are proposed to be permitted to open new places of business, in places where population is not more than 1,00,000, 15 days after submitting the information on the same.
“The proposed limit of 1,00,000 on population is, to encourage the opening of places of business in tier II and below towns / or villages,” IRDA said.
IRDA also added that in respect of all other places of business, the insurers will be accorded approvals on an aggregate basis once in a financial year, based on their expansion plans.
However, insurance firms are allowed to approach IRDA for any urgent business proposals for opening any other places of business, it added.
The proposed norms are to help increase the penetration of the sector in rural & semi-urban areas Proposed norms are to open minimum 25 per cent of offices in areas that have lessthan-1,00,000 population. For all other places of business, the insurers will be accorded approvals on an aggregate basis
Src: PTI
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