Loss adjusters, or "surveyors" as they are known in
the Indian market, are the subject of the latest Circular issued by
the Indian insurance industry regulator, the Insurance Regulatory
& Development Authority (IRDA).
Shortly after the Indian insurance market was opened to
competition the IRDA issued its "Insurance Surveyors and
Loss Assessors (Licensing, Professional Requirement and Code of
Conduct) Regulation 2000". These regulations were out of
line with other IRDA regulations published for Insurers, brokers,
etc., in that the Surveyors Regulations did not expressly refer to
a foreign investment cap or specifically list when a surveyor's
license could be cancelled.
In March 2013 the IRDA issued its "Insurance Surveyors and
Loss Assessors (Licensing, Professional Requirements and Code of
Conduct) Amendment Regulations 2013. The Amendment Regulations
covered licensing, duties and responsibilities, the suspension and
cancellation of licences, and the further registration of corporate
surveyors. In relation to the latter, the Amendment Regulations
A corporate surveyor can only be a company incorporated under
the Companies Act 1956, a firm formed under the Partnership Act
1932, or a limited liability partnership incorporated under the LLP
The name of the corporate surveyor must include the words
"Insurance Surveyor and Loss Assessors."
There must be at least 2 directors/partners, and no
director/partner can work in the same capacity with more than one
Any licensed surveyor appointed as director/partner must only
accept work and issue reports in his capacity as a director/partner
of the corporate surveyor.
In a Circular dated 10 October 2013 but released by the IRDA on
29 October, the IRDA reiterated the Amendment Regulations and
referred to 8 particular provisions as requiring "immediate
attention and necessary action from all existing and new
corporate" surveyors. These provisions include the
The requirement for there to be at least 2 directors/partners,
and for them to only accept work and issue reports in their
capacity as a director/partner of the corporate surveyor,
suggestive perhaps of work being accepted and reports being issued
independently of the corporate structure.
A restriction of foreign ownership to 26%, in line with the rest
of the insurance industry. The fact that this particular
requirement is the only one to appear in a bold font suggest that
the IRDA has come to learn of contraventions of this rule, a
perception reinforced by a reference to the manner in which that
26% holding is to be calculated - the calculation must be in line
with the rules that apply to Indian Insurers. In addition to
appearing in bold font, the font size has also been increased by
All corporate surveyors agree to submit a declaration to the
IRDA of material changes (including the resignation, death or
suspension of a director/partner, and a change in shareholding)
within 15 days "for grant of modified license. The license
issued by the Authority (in original) shall be surrendered at the
time of application for grant of modified license."
It is always difficult to say what prompts this type of
Circular, but Circulars such as these are unusual rather than
unheard of, so the fact that the IRDA has issued this Circular
suggest that they have come by information that has displeased
them, and they are prepared to act.
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The insurance statutory and regulatory framework has,
historically, strictly restricted the amount of commission or
remuneration that can be paid to insurance agents and insurance
intermediaries (such as insurance brokers, corporate agents, web
aggregators and insurance marketing firms) for the solicitation and
procurement of insurance business.
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