ANNUAL REPORT 2007-08
taxation aspects of insurance and other incidental matters thereto. The Committee is headed by Member (F&I) of the Authority, with Member (Actuary) as the permanent Invitee. The Committee comprises of representatives from the insurance industry, the practitioners from the profession of chartered accountants and from the ICAI (placed atAnnexure). The Committee also has the option to have special invitees at its meeting based on the issues under deliberation. The constitution of the Committee has been kept fairly broad based.
The intention is to utilize the expertise inside and outside the insurance sector on specific issues which would be placed before the Committee and to make appropriate recommendations for the consideration of the Authority. The views of the Committee would be recommendatory in nature and the Authority reserves the right to take appropriate decisions based on the same.
(ix) Review of advisory functions performed by the Authority.
The Authority constituted a Committee chaired by former LIC Chairman, Shri N.M. Goverdhan to examine the efficacy of various intermediaries, their cost effectiveness, and their weaknesses and make recommendations on the proposed
changes required to make them effective professionals and to facilitate provision of better services to customers.
The Committee has recommended various changes to be incorporated / brought about in existing distribution channels concerning Corporate Agents, Individual Agents, Referrals, Bancassurance etc. with proposed amendments to respective Act and Regulations.
These, inter alia include licencing and structure of corporate agents , recruitment of agents, commissions structures, referral arrangements, direct tele-marketing measures to improve service to policyholders and enlargement of the scope for entry of more institutions under the agency structure.
The Committee has also suggested review of the restrictions on commissions and brokerages imposed by sections 40(2) and 42E as also on the commissions which forms part of management expenses, parity on product design on accident and health products, issuance of multi-year policies, setting- up of extension counters/ representative offices across the country. The recommendations are under discussion in order to decide on the acceptance and initiate steps for the implementation.