India’s
biggest car maker from last few decades Maruti Suzuki India Ltd is set to re-enter the
insurance broking business after a ban of two years. It has sought broking
licence from IRDA with a licence from
the regulator, and is under the process of formulating the company by the name
of Maruti
Insurance Broking Private Limited.It will be managed by Mayank Pareek, managing executive officer
(marketing and sales) at Maruti who has a wide 15 years of experience in the
Automobile Industry.
Maruti
had been selling motor insurance under the Maruti Insurance brand since 2002
until it was stopped by the Insurance Regulatory and Development Authority
(IRDA) in March 2010 for allegedly violating foreign investment norms. Local
rules bar foreign companies from holding more than 26% in an insurance venture.
Maruti had set up a separate entity named as Maruti Insurance
in 2002 and started distribution of car insurance policies through its
nation-wide dealer network. Maruti Insurance tied up as a corporate agent with
National Insurance Company, Bajaj Allianz, New India Assurance and Royal
Sundaram and sold insurance policies. The company was set up with two
subsidiaries and by December 2005 they were able to sell more than two million
insurancepolicies.
As per rule, a corporate agent can hold a license to act as an insurance agent for only one life insurance company and one general insurance company. Reports suggested that Maruti Suzuki India Ltd had formed five group entities Maruti Insurance Distribution Services Ltd, Maruti Agency Network Ltd, Maruti Insurance Agency Services, Maruti Insurance Agency Logistics Ltd and Maruti Insurance Agency Solutions Ltd. Maruti was acting as a corporate agent through these group entities for five or six insurance companies which was considered as a violation of the rules laid down by IRDA. This is considered to be the prime reason of levying the ban on Maruti Insurance,other reason was that local insurers alleged that Maruti service stations were inflating bills and pushing them into losses through hefty claims.
As per rule, a corporate agent can hold a license to act as an insurance agent for only one life insurance company and one general insurance company. Reports suggested that Maruti Suzuki India Ltd had formed five group entities Maruti Insurance Distribution Services Ltd, Maruti Agency Network Ltd, Maruti Insurance Agency Services, Maruti Insurance Agency Logistics Ltd and Maruti Insurance Agency Solutions Ltd. Maruti was acting as a corporate agent through these group entities for five or six insurance companies which was considered as a violation of the rules laid down by IRDA. This is considered to be the prime reason of levying the ban on Maruti Insurance,other reason was that local insurers alleged that Maruti service stations were inflating bills and pushing them into losses through hefty claims.
This time the company is planning to go ahead
with equity partnership from multiple partners whose names are still not
disclosed by company people.Now only time will tell do they repeat the same mistakes or not.
