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Scope of Outsourcing Under Irda

The document outlines guidelines from the Insurance Regulatory and Development Authority (IRDA) regarding outsourcing by insurer firms. It states that core activities cannot be outsourced, but support activities can be if risk management procedures are followed. It provides examples of activities that can be outsourced, such as premium collection, check pickup, clerical bank reconciliation tasks, and admitting or repudiating claims. Certain regulated entities are restricted to only outsourcing activities allowed under their respective regulations.

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Shivangi Bajpai
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36 views1 page

Scope of Outsourcing Under Irda

The document outlines guidelines from the Insurance Regulatory and Development Authority (IRDA) regarding outsourcing by insurer firms. It states that core activities cannot be outsourced, but support activities can be if risk management procedures are followed. It provides examples of activities that can be outsourced, such as premium collection, check pickup, clerical bank reconciliation tasks, and admitting or repudiating claims. Certain regulated entities are restricted to only outsourcing activities allowed under their respective regulations.

Uploaded by

Shivangi Bajpai
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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SCOPE OF OUTSOURCING UNDER IRDA GUIDELINES

1. The insurer firm shall not outsource core activities. However, activities that
support/ancillary to core activities can be outsourced if they follow the risk
management requirements, subject to reporting guidelines. Execution of non-core
activities is an essentially core function and an insurer cannot outsource non-core
activities without proper risk management/ due diligence.
2. Insurer can outsource premium collection and check pick up activities (hereinafter,
‘PCCP’). Premium Collection can be outsourced only to RBI approved banks,
institutions; Business correspondents of banks; Government- Private partnerships;
Government offices; Payment aggregators; RBI approved gateway and payment
Collectors; Licensed Insurance Intermediaries. Additionally, PCCP can be outsourced
to entities (registered companies) and Individual/Corporate Agents (must have been
in existence for at least 2 years).
3. Clerical activities associated with Bank Reconciliation (core activity) like sorting and
organizing the instruments can be outsourced to Scheduled Commercial Banks.
Tallying cannot be outsourced.
4. Admitting and repudiation of Claims can be outsourced to Legal expert, Average
adjustors, Recovery agents, third party claims negotiators, Claims document
aggregator, International travel and medical assistance services.
5. Agents, Corporate Agents, Brokers, Third Party Administrators, Surveyors and other
regulated entities, as provided in the Insurance Act,1938, IRDA Act,1999 and
Regulations are not allowed to perform any outsourcing activities other than those
permitted by the respective regulations/instructions governing their licensing and
functioning.

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