Insurance Scenario

As a part of the Reforms in the Finance Sector in India, after a detailed study of the developments in the Insurance Sector correlating with the pre and post Nationalisation Set up of both Life and Non-Life Insurance, the Government of India has promulgated the Insurance Regulatory and Development Authority (IRDA) Act, 1999 paving way for the entry of Private Insurance Operators, thus breaking the monopoly of the State Owned Insurance Organizations. Prior to this enactment, Insurance Agents were representing the Insurance Companies and catering to the needs of the Clients. But with the stipulation that an Agent can represent only one Insurance Company and help that Insurance Company only for procurement of business had, obviously a very little scope of client reach and extending satisfactory post policy servicing.

After the Liberalization of Insurance Sector through the IRDA Act,1999 the Insurance Intermediary Concept has been introduced on the lines of the system prevailing in many parts of the Globe. An Insurance Broker, unlike the Agent, represents the interests of the Policy Holder not only for buying Insurance but throughout the policy period by involving in the Policy Administration and Claims Servicing spheres as well. The insurance Broker also analyses the total Insurance portfolio of the client, organize a well-defined Insurance programme on behalf of the client, present the same to the competent Underwriters, obtain the premium offers, compare the terms, and submit back to the client for their final evaluation and placement of the Policy with their choicest Insurer.

The role of Insurance Brokers has assumed prominence especially after the IRDA abolished the erstwhile Tariffs of Premium Rates. Though the Terms, conditions and exceptions under various Insurance Policies still continue to be uniform to all the Underwriters, it is the Broker who plays the most vital role in negotiating on behalf of the client with the competent underwriter for the best Rates and Terms suiting to the requirement of the client. It has been an accepted fact that many a Corporate have been richly benefited by utilizing the services of a professional insurance intermediary. On the other hand, the Regulator also has been focusing more and more attention on encouraging the Distribution Channels in Insurance selling to ensure that the benefits of Insurance reach the nook and corner of the Country. In the current scenario of growing Economy and the ever changing, varied demands of the Customers, Brokers play a very vital role in organizing the Insurance solutions to them.