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Thursday, July 11, 2013

New product norms will not affect life insurers’ growth this fiscal, says IRDA chief

The regulatory requirement of the life insurance industry to re-file all existing products will not impact its growth this fiscal, said Insurance Regulatory and Development Authority Chairman T. S. Vijayan.

According to IRDA norms, insurance companies have to re-file all their existing group and individual products by October. “It (re-filing of life insurance products) is an ongoing process. There is not a single company which has not got a product approved… The whole process is going on seamlessly,” said Vijayan.

On distribution of insurance products through banks (bancassurance), Vijayan said the regulator is considering the proposal to allow banks to sell products of more than one insurance company. Currently, a bank is allowed to sell products of only one life, one non-life, and a standalone health insurance company.

However, to improve insurance coverage, the Finance Minister in the Union Budget had announced that banks can be allowed to act as brokers, selling policies of multiple insurance companies.

The Life Insurance Council, an industry body, has recommended that a bank tie up with at least five insurers with not more than 25 per cent share per insurer.

“Banks have a huge branch network and they should be representing the customer rather than the insurance company. We are having a series of discussions and committee meetings on how best to utilise bank branches to improve insurance penetration,” said Vijayan.

The regulator also said it is considering increasing the debt investment limit of the country’s largest insurer, Life Insurance Corporation . “There is a demand from LIC that it wants a higher limit in debt and we are examining it very closely,” said R. K. Nair, Member Finance and Investments, IRDA.

Source: thehindubusinessline


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