We often get irritated when we get sales promotional calls from call centers or company representatives canvassing for either insurance business or real estate.
They don’t get the kind of respect that they need to, because the consumers of their services generally believe the intermediaries rarely keep up their words and camouflage the finer and unacceptable aspects of their proposals with their sweet talks and lure the prospects.
The developed countries do have a more rigorous system of qualifying these intermediaries, both companies and individuals serving in these companies.
A quick browse of how regulations work in other countries show how on India this needs to better organised.
“ Western countries regulate insurance and real estate intermediaries through mandatory licensing, strict market conduct rules, and ongoing supervision. Key measures include mandatory professional registration, consumer protection transparency standards, and financial accountability requirements.
Insurance Intermediaries
- Licensing & Registration: Intermediaries must pass professional exams and register with state or national authorities (such as the EU’s Insurance Distribution Directive framework or national bodies like Switzerland’s FINMA).
- Conduct & Disclosure: Agents and brokers must disclose commission structures, avoid conflicts of interest, and ensure products match client needs.
- Financial Security: Professionals must maintain mandatory professional indemnity insurance and keep client premium funds in separate, protected accounts.
Real Estate Intermediaries
- Licensing & Education: Brokers and agents must complete accredited pre-licensing education, pass state/provincial exams, and maintain active state-issued licenses.
- Trust Accounts: Client deposits and escrow funds must be kept in dedicated, audited trust accounts separate from business operating funds.
- Consumer Disclosures: Intermediaries are legally required to disclose material property defects, dual agency roles, and written financial terms to all parties.
We do have certification from IRDA for Insurance intermediaries and RERA certification for Real estate intermediaries but don’t know for sure if prospective buyers of these services are aware of these certifications that the representatives of banks, insurance companies or real estate promoters should have. Also the regulations are not made widely available to buyers.
For Eg: if a buyer or seller wants to buy or sell a property in US, they have to necessarily go through these Realtors who inspect the property, title deeds, liabilities attached to property, fix the market price based on age of the property and locations. They negotiate on behalf of their buyers or sellers and many times buyer and seller hardly meet each other. The realtors fix their commissions upfront that needs to be mandatorily paid to them when a transaction happens and sue their parties if they go back on their commitment.
Both insurance and real estate intermediaries need to earn respect and both they and government must work on regulations that lend credibility to the business.
Insurance and Real estate intermediaries should do well to follow the best practices of their businesses. They are just not agents and brokers to be scantily respected.
#insurancebusiness
#realestatebusiness
THE PULSE by Sivakumar Gopal 