This story is from September 21, 2006

IRDA may ease norms for micro insurance

TNN / Sep 21, 2006, 00:40 IST

Share

AA

Text Size

Small
Medium
Large

The IRDA is considering allowing multiple partnerships between life and non-life firms to sell composite products and share distribution for micro-insurance.

MUMBAI: In a move that will boost the micro-insurance segment, the insurance regulator IRDA is considering allowing multiple partnerships between life and non-life firms to sell composite products and share distribution for micro-insurance.
Additionally, for micro-insurance, IRDA will also consider allowing banks multiple partnerships with life and non-life firms to sell their products.
Currently, as per regulation, one life company can tie up with only one non-life company to develop a composite product. And banks are allowed to pick only one life and a single non-life partner for bancassurance.
IRDA is now weighing the option of allowing multiple partnerships to increase distribution network and deepen penetration of insurance in the rural segment.

"We have not yet issued or drawn up guidelines. But we are seriously considering the option as far as micro-insurance is concerned," said IRDA chairman CS Rao, on the sidelines of the Insurance Brokers Association annual meet.
The move comes at a time when insurance firms are still examining the viability of micro-insurance and the challenges of managing distribution and costs effectively in this segment.
IRDA had kickstarted the discussion in this area when it issued guidelines allowing life and non-life companies to join hands to develop joint products and share distribution. However, the guidelines restricted the partnerships to single entities.
Speaking on the impending detariffing, Rao said in the next three months, IRDA would be issuing final guidelines regarding file, use of products and a code of conduct for brokers and insurers in a free pricing market.
He said although IRDA was not laying down a minimum and maximum cap on pricing, he hoped that firms would have adequate internal controls to ensure that pricing remains realistic for reinsurance support.

End of Article

FOLLOW US ON SOCIAL MEDIA