As a part of the reforms introduced in the financial sector in India, the Insurance Regulatory and Development Authority (IRDA) Act 1999 was promulgated by the Government of India 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 while 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, limited the scope to reach client and ensure a satisfactory post policy servicing.

With liberalization of insurance sector through the IRDA Act 1999, the concept for insurance intermediary was introduced which was in accordance with the footprints of global players, prevailing standard and benchmarking. Unlike the agent, an insurance broker represents the interests of the policy holder not only for the purpose of procuring Insurance coverage but for a hassle-free administration and servicing in face of claim settlement throughout the policy period. The insurance broker makes an analysis of the total Insurance portfolio of the client, organizes a well-defined insurance program on behalf of the client, presents it to the competent underwriters, obtains their respective premium offers, compares the terms, and submits it to the client for their final evaluation and placement of the policy with Insurer of their choice.


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, the broker has assumed a very important place as they not only negotiate rate and terms on behalf of the client but also safeguard client’s interests in face of claim settlement. Such an arrangement has fully optimized the entire process and continues to justify the importance of the broker under the whole insurance spectrum.

On the part of regulator as well, there has been a greater emphasis on strengthening & widening the distribution channels to successfully meet the varying demands of the customers. It further cements the important positions of brokers as they have become one of the strongest pillars of the whole distribution system of insurance industry.