There are only a handful of world-renowned insurance brokers, which include names like Marsh McLenan, AON and Segdwick. Incidentally, Sedgwick already has an existing health management joint venture in India called Sedgwick Parikh.

However, government officials have categorically told the brokerage majors that the decision to cap foreign investment in insurance was a political one. The officials have apparently told them that they set up shop under the present 26 per cent norm for now, and that in a matter of years the provision was bound to be amended to raise the ceiling.

Incidentally, the government is under pressure from the existing public sector general insurers to desist from amending the Insurance Act allowing broking in a hurry. They are arguing that with no experience of working with brokers themselves, this measure could put them at disadvantage vis-a-vis the new companies. All the newly licensed players, except Reliance, have tied up with global partners having adequate exposure to brokerage practices and, could, to some extent, beat them on this count in the market. The Act at present allows commission on insurance to be paid only to agents. For similar payments to be made to brokers, the legislation will require parliamentary approval.

Meanwhile, industry sources said the regulator has amended several times the regulations for brokers, drafted earlier this year. The changes have not been conveyed to the ministry after the first draft was formulated, since the government seems to be dragging its feet on the legislation. Going by current indications, it is doubtful if it would be amended even in the Budget session, officials said. Industry sources regretted the delay in notifying the regulations for brokers, since a number of companies have built it into their business plans.

IRDA discusses third-party administrators' norms
The officials of the Insurance Regulatory and Development Authority (IRDA) on Tuesday met health management companies and general insurers to discuss regulations governing third-party administrators (TPAs) for health insurance.

Among the TPAs who attended were: Sedgwick Parikh, Apollo and Paramount. All the four existing general insurance companies were also present, as also the new players - both those who have been issued licences and those who have applied for one. These included Reliance, Tata AIG, Max New York Life, Iffco Tokio Marine and Royal Sundaram Alliance. Draft guidelines on TPAs have also been sent to these companies for comments before the regulations are finalised. Public sector companies, especially New India and United Insurance, are already in advanced stages of negotiations with TPAs, who are at present catering exclusively to corporates. TPAs act as intermediaries in a process that obviates payment by the policy-holder to either the insurer or the medical services provider.