Insurance Regulatory and Development Authority (IRDA) is likely to come up with ‘Bancassurance’ guidelines by the first week of February, Chairman J. Hari Narayan said on Friday.
“The final guidelines are expected by the first week of February,” he told reporters on the sidelines of an event of Insurance Brokers Association of India here.
When asked about the concerns of the Reserve Bank of India with regard to bancassurance model, he said they were looking into all representations.
In the bancassurance model, banks sell products of insurance companies and the present law allows a bank to sell insurance product of one company as an agent.
However, some banks want to convert into a “broker”, beyond the present role as “agents”, which will allow them to hawk the offerings of more than one insurer.
So far, the IRDA has sounded positive on the demand, but the RBI wants banks to restrict to one single company and continue being an ‘agent’.
The insurance watchdog also said it was not in favour of dismantling of declined motor pool as suggested by the general insurers and want this system to continue for sometime before taking a call.
“We have concerns regarding dismantling of declined motor pool.
“When it was completely dismantled, we found that hardly any sales of third-party were found by the private insurers and all of it was made available by the public insurer. So, I think, we should continue with it for 1-2 years,” Mr. Narayan said.
Mr. Narayan also said that the regulator was likely to come up with investment guidelines by the end of this month.
Referring to the appointment of a fifth member in IRDA by the government to look after distribution, the IRDA chief said that it would have been better to have a member for consumer rights.
Keywords: IRDA guidelines