Allot new agents in case of removal of existing ones: IRDA

NEW DELHI: To ensure continuity of services, sectoral regulator IRDA today said life insurance companies will have to allot new agents to policyholders in case of removal of existing agents.

"Insurance companies are allowed to allot any of the lapsed orphan life insurance policies to individual agents whose license is in force for the purpose of conservation and rendering effective policy service to the policyholders," IRDA said in its guidelines on servicing of such policies.

'Orphan life insurance policies' means the policies initially effected by an individual agent whose services were subsequently terminated or removed from the rolls of the insurer.

The Insurance Regulatory and Development Authority (IRDA) has said that only those agents, who have completed at least two years of service, can service the orphan policies.

The IRDA said that single premium life insurance policies are not eligible for allotment under these guidelines.

"The number of policies allotted to an agent shall not exceed 20 per cent of the total number of policies that were introduced by him/her and in force as on the date of allotment," IRDA added.

The insurer, it said, will have to put in place procedures for capturing the details of allotment of lapsed orphan policies and the new agents who would be servicing those policies.

All life insurers will have to submit periodical reports to the IRDA for servicing of orphan policies.