IRDA favours zonal bancassurance tie-ups

New insurance companies are likely to benefit from the Insurance Regulatory Development Authority draft guidelines on bancassurance.

The regulator has divided the country into geographical zones.

The IRDA's exposure guidelines on bancassurance have said that banks cannot tie up with more than one life, one non-life and one standalone health insurance company in any of the States.

Further, provided that in case the agreement of general insurer/s does not have any health product to distribute, the bancassurance agent may tie up with one more general insurance company carrying on exclusive business of health insurance.

The regulator has also said that insurers other than the specialised insurer cannot tie up with any bancassurance agent in more than nine States or Union Territories in Zone A and six States / Union Territories in Zone B.

“The restriction of number of States/Union Territories a particular insurer could tie up with in Zone A and Zone B means that as an insurer we can approach the bank to be our bancassurance agent in other States/Union Territories,” said Mr Amarnath Ananthanarayanan, MD and CEO, Bharti Axa General Insurance.

“This is clearly a step in the right direction as it will give a chance to the banks to monitor insurance company service levels and ensure that its customers get the best in class general insurance products and services,” he added.

“Allowing banks to enter in to multiple tie-ups will facilitate insurance companies to variablise and reduce the cost of distribution. Therefore, open architecture will provide sustainable model for delivering insurance products to semi-urban and rural areas,” said Mr T.R. Ramachandran, CEO and MD, Aviva India.

deepa.n@thehindu.co.in