IRDA News: Clarifications on Guidelines on Outsourcing of Activities by Insurance Companies

With reference to the captioned guidelines the following clarifications are issued for compliance by all insurers.

1.Reference is invited to the Authorities Circular No. IRDA/Life/CIR/GLD/013/02/2011 dated 01st February, 2011 wherein it was prescribed vide proviso 9.15 that the insurer shall report to the Authority before making payment to the third party service providers which is either a group entity as defined in provisions of Regulation (2) (ca) of IRDA (Investment) Regulations, 2000 and having a common director with the insurer. 

a.In clarification of the above provision it is now clarified that where the terms and quantum of payments agreed are explicitly mentioned in the terms and conditions of the agreement /MOU entered with above referred third party, the disclosure of the same shall be reported as soon as the agreement is made. And all subsequent transactions shall form part of Form – A and be reported in accordance to Clause 11.2 of the within referred guidelines.

2.Reference is also invited to proviso 5.2 read in conjunction with Sl No. 2 Column 4 of Annexure – 1 of the within referred guidelines. With regard to the Registration Fee collected under RSBY in addition to the entities referred therein, it is clarified that the TPAs which are engaged as Intermediaries for discharging various pre determined functions may also collect the registration fee.

The above clarifications will come into effect immediately.
Sd/-
A.Giridhar
Executive Director, IRDA