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Financial Sector Assessment Program

Technical Session IV December 29 ‘ 2010. Financial Sector Assessment Program. Sanjay Kedia, Marsh India. ICP 24 - Intermediaries. ‘ ….Essential to Protect Consumers and promote confidence..’ The regulations at large covers all “Essential Criteria” of ICP 24. ICP 24 – Feedback on Practice.

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Financial Sector Assessment Program

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  1. Technical Session IV December 29 ‘ 2010 Financial Sector Assessment Program Sanjay Kedia, Marsh India

  2. ICP 24 - Intermediaries ‘….Essential to Protect Consumers and promote confidence..’ The regulations at large covers all “Essential Criteria” of ICP 24

  3. ICP 24 – Feedback on Practice • b) …Intermediaries to have ……professional knowledge and ability as well as having a good reputation. • Broking community has gone through challenges in earning reputation of larger system • Brokers represent Policyholders interest: Regulator may be more inclusive and consider them to be part of various committees on policy matters

  4. ICP 24 – Feedback on Practice • d) ..an intermediary who handles client’s money to have sufficient safeguards in place to protect these funds. • Reinsurance Broking : May be strengthened further • Direct Broking : Broking regulations (23) need to have more clarity. Globally brokers handles premium and claim collection providing customer convenience and efficiency in administration • Coinsurance: • Lead Insurer in Indian context effectively handles client money for other coinsurers • Coinsurance sharing without knowledge of policyholder creates further complexity Coinsurance requires clarity for Policy Holders interest and to Manage Counter Party risk / Systemic Risk in case of insurer failure

  5. ICP 24 – Feedback on Practice • e) ..Intermediaries to give customers information on their status, being independent or associated with particular insurance companies… • Agents of different Insurers within a family confuses policyholders as it mimics the nature of a Broker • f) Authority to have powers to take action against entities that are intermediation without license or registration • Regulation 17 of Insurance Brokers prohibits this. • International reinsurance brokers without license at times still conducts reinsurance broking with insurance company • lack of awareness of Broking regulations among Insurance Companies seems to be cause

  6. Thank You www.marsh.com Leadership, Knowledge, Solutions…Worldwide.

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