The insurance industry sure has caught the eye of many unlikely entities.

First, it was the corporate entities jumping onto the bandwagon to set up insurance entities; then banks decided to hike their fee-based income and join the fray.

And it was not long before entities such as travel agents decided that it would be worth the 100-hour training to hawk insurance products. Now it is the turn of the traders.

JLI Insurance Brokerage Company, one of the 11 to have received a brokerage licence, signed a memorandum of understanding on Thursday with Tata AIG General Insurance Company.

JLI, an associate company of Frontier Trading, was earlier known as Japan Life India. The core business of the entity was selling magnetic mattresses.

The opening up of the insurance sector has unveiled immense opportunities for companies that would otherwise have nothing remotely to do with insurance business. Insurance companies have of late been signing on a series of corporate agents.

Now with the Insurance Regulatory and Development Authority having granted licences to 11 brokerage firms, the next lot of MoUs will be with brokerage houses.

Tata AIG managing director Dalip Verma stated: "The broker channel is an important distribution channel for us and the tie-up with JLI is the first of many such tie ups we will be entering into."

Said a senior official with one of the private insurers: "Entities with capital that meet the Irda broker regulations are jumping in to sell insurance policies."

Essentially, the promoter could be anyone with capital, who then hires insurance professionals to act as brokers and starts a brokerge entity after getting the necessary clearance from the Irda.

Contrary to corporate agents, brokers are supposed to be directly looking to the interests of the customer and not the insurance company.

However, said a senior Tata AIG official: "We would like to engage JLI to sell our products and so we have entered into a tie-up. We are also considering a similar tie up for our life business at a later stage."

Not only does the industry expect many more high networth business individuals to enter the fray, another fear looming large among insurers is corporates themselves setting up dummy insurance brokerage firms to get back a share of the premiums paid to the insurance companies, through brokerage commission.

While the Irda has warned against allowing such a possibility, insurers say there is little the regulator can do to enforce the rule should corporates enter into cartelisation.

Indeed there is a magnet attracting unlike poles to the insurance business.