The Insurance Regulatory and Development Authority of India (IRDAI) has set up a panel to frame standard professional indemnity policy for insurance intermediaries that can be issued by all the insurers.
The development came after the regulator witnessed several instances where policies taken by insurance intermediaries did not comply with the regulatory provisions.
Professional indemnity policy offers protection to professionals against potential claims for injury or loss resulting from their advice action for failure to fulfil their duties.
Insurance intermediaries such as insurance brokers, insurance web aggregators, and corporate agent are required to take professional indemnity insurance policies governed by different regulations.
The insurance regulator said that while the existing regulations clearly stipulate the indemnity limit, coverage, excess, and retroactive date, it has come across a number of instances where the policies taken by intermediaries did not comply with regulatory provisions.
The panel has been asked to prepare a standard professional indemnity policy "which covers all the contingencies and conditions (retroactivedate, indemnity limits, excess, etc) mentioned in the Regulations" that can be issued by all insurers.
Insurance intermediaries are insurance brokers, insurance web aggregators, corporate agents, and insurance marketing firms. The panel has been asked to submit its report within one month, said IRDAI.
It is being headed by Yegnapriya Bharat, CGM (Non-Life), IRDAI. Its members are Umesh Rathod (The New India Assurance Co), Kasturi Sengupta (National Insurance Co), Surbhi Goel (HDFC ERGO General Insurance Co), and Najim B (TATA AIG General Insurance Co).
The insurance intermediaries engaged in solicitation and distribution of insurance products are required to take professional indemnity insurance policies in order to get themselves indemnified from the claims lodged against them, arising out of the contingencies mentioned in the regulations governing them.