IRDA has come up with some new guidelines to discourage agents from switching across companies, primarily to discourage & check policy lapsation.

Across India, most Life Insurance co's have been seeing almost 25% lapsation in their overall portfolio, and a big chunk of this is contributed by the agent channel. Most lapsation was observed to occur in orphaned policies (ie policies without an active agent in the system).

IRDA has now come up with the following guidelines:
- The agent has to submit details of all his policyholders including their contact details. The insurance company, in turn, has to ensure an alternative service arrangement for all those policyholders.

- Companies have also been asked to withhold renewal commissions of those agents, who quit before completing five years of services.

- Insurance firms say that many of the guidelines are extremely demanding and Insurance companies would simply refuse to grant NCOs to agents, who want to join another company rather than follow the difficult procedure.

- Among other things, the life company has to ensure that there is an alternate arrangement for taking care of the policies orphaned by any agents exit. These arrangements, the regulator has said, should go beyond a call centre facility, which is also an essential requirement. Insurance companies have been asked to intimate to each policyholder that their agent has quit and there are alternate arrangements being made to service them.