Insurance coverage Regulatory and Growth Authority of India (IRDAI) has constituted a taskforce on the Bancassurance channel for the distribution of insurance coverage insurance policies via banks with an goal to evaluation the mannequin and perform modifications if required.

Citing mis-selling/compelled promoting complaints being obtained on this distribution mannequin, the insurance coverage regulator mentioned the phrases of reference of the taskforce embody “to counsel regulatory stipulations in the marketplace conduct necessities of bancassurance companions.”

It wished the taskforce, comprising officers of IRDAI and as many 10 representatives of banks and insurers, to check the effectiveness of present bancassurance mannequin of insurance coverage intermediation and suggest methods and technique of bettering the effectivity. “The worldwide finest practices on this mannequin must be examined and strategies made for appropriate modifications, if any, to the home regulatory necessities,” the regulator mentioned, setting a two month deadline for the taskforce to submit its suggestions.

In an order constituting the taskforce, IRDAI mentioned banks play an essential position in distribution of insurance coverage merchandise. They’re engaged in distribution of insurance coverage merchandise as company agent and/or as grasp policyholder topic to the relevant regulatory framework. Whereas the choice to arrange a separate authorized entity for distribution of insurance coverage merchandise as insurance coverage brokers is accessible, the banks haven’t exercised it.

However their massive community throughout nation, via branches, the contribution of banks as company brokers was 5.93% of non-life premium and 17.44% of latest enterprise premium for all times insurance coverage in 2022-23. “One of many methods of reaching the final mile and making accessible insurance coverage merchandise to the nook and nook of the nation is leveraging the huge financial institution department community,” the regulator mentioned.

“It’s felt essential to evaluation the prevailing Bancassurance intermediation mannequin and perform modifications, if any, to the regulatory framework governing the identical with concentrate on the safety of policyholders’ curiosity,” mentioned IRDAI, which is pursuing insurance coverage for all by 2047 purpose.

At one other stage, the regulator had lately launched a lead insurer programme beneath which it designates a life and a basic insurer every for each State primarily to create consciousness of insurance coverage. Offering the cue for the programme is the lead banker scheme, for every State, of the federal government.

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