Insurance alert! This IRDAI advice is very important for claims - All you need to know

Regulatory body Insurance Regulatory Authority of India (IRDAI) has issued an advisory for insurance intermediaries like the insurance broker, insurance web aggregators, corporate agents and insurance marketing firms to take professional indemnity policies in order to get themselves indemnified from the claims lodged against them.

The claims can be lodged against the intermediaries as per the contingencies mentioned in the regulations governing them.  

Know what regulations govern each of the intermediaries:

Following regulations deal with the Professional Indemnity Insurance Policy for the Intermediaries:

1) Insurance Brokers: Regulation 24 – Schedule II- Form S of the Insurance Regulatory and Development Authority of India (Insurance Brokers) Regulations, 2018

2) Corporate Agents: Regulation 19 – Schedule II of the Insurance Regulatory and Development Authority of India (Registration of Corporate Agents) Regulations, 2015

3) Insurance Web Aggregators: Regulation 18 – Schedule III- Form K of the Insurance Regulatory and Development Authority of India (Insurance Web Aggregators) Regulations, 2016

4) Insurance Marketing Firm: Regulation 9 – Schedule X of the Insurance Regulatory and Development Authority of India (Registration of Insurance Marketing Firm) Regulations, 2015

The regulator has also advised the intermediaries to follow the laid down rules. "While the above Regulations clearly stipulate the indemnity limit, coverage, excess, Retroactive date etc., the Authority, through onsite inspections and offsite monitoring has come across a number of instances where the policies taken by intermediaries do not comply with Regulatory provisions," it has said in the advisory.

The insurance regulator has also constituted a a committee in order to examine the issues around Professional Indemnity insurance policy for Insurance Intermediaries. The committee comprises of six members with a provision of including special invitees as per the directions of the IRDAI Chairperson.

The committee will prepare a prepare a Standard Professional Indemnity policy which covers all the contingencies and conditions (Retroactive date, Indemnity Limits, Excess etc.) mentioned in the Regulations which can be issued by all insurers.

The committee will also look into any other matter relating to the Professional Indemnity insurance policy as stipulated in the Regulations.

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The Committee shall submit its report to the Chairman, IRDAI within a period of one month from the date of this order, the advisory says.