Domestic and foreign insurance intermediaries can now set up shop in all Special Economic Zones (SEZs) in India.
The latest Finance Ministry notification says that the IRDAI may permit an insurance intermediary registered with the IRDAI or from outside the country, to transact business “in the Special Economic Zones”, reported Hindu Business Line.
Currently, the insurance regulator will work out detailed guidelines while the Income Tax Department is expected to clarify on matter such as tax benefits.
An insurance intermediary means individual agents, corporate agents including banks and brokers who intermediate between the customer and the insurance company; web aggregators; insurance repositories; insurance marketing firms; insurance self-network platforms and points of sales. The term “insurance intermediary” also includes surveyors and third party administrators.
The notification sets out three conditions for setting up businesses for insurance intermediaries.
Firstly, an intermediary will set up its place of business in a SEZ with the prior approval of the IRDAI. Secondly, such permission may include approval for acting as intermediary or insurance intermediary for soliciting / procuring / servicing of insurance business, as the case may be, from entities within the SEZ and outside India subject to the provisions of the Special Economic Zones Act, 2005.
Thirdly, entities acting as intermediary or insurance intermediary within the SEZ will have to operate in accordance with the guidelines of the IRDAI.
Rules for insurance business in SEZs were first notified in 2015. They allowed insurers to conduct business in SEZs but did not mention anything about insurance intermediaries. Later, the IRDAI issued guidelines for intermediaries to operate in International Financial Service Centres, but this was limited to one particular area and not all SEZs. However, this latest notification opens up all SEZs to intermediaries.