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Finance Ministry asks IRDA to reconsider bancassurance guidelines

While a corporate agent can sell one life, one non-life and one standalone health insurance policy, there is no ceiling on the number of tie-ups that a bank can have with insurers through a broking license

 

The Finance Ministry has asked Insurance Regulatory and Development Authority (IRDA) to rethink about the proposed bancassurance guidelines. The ministry has also told IRDA to consult insurers and banks before finalising the guidelines.
 
According to the proposed guidelines a bank can distribute insurance either through the agency channel or the broking channel to its customers. While a corporate agent can sell one life, one non-life and one standalone health insurance policy, there is no ceiling on the number of tie-ups that a bank can have with insurers through a broking license.
 

For conducting business through the agency channel banks need to obtain a license to act as an agent in one or more states. The exposure draft further states that the bancassurance agent desirous of multiple tie-ups can do so with one insurer in maximum 20 and minimum 10 locations. The proposed guidelines classify the country into three zones (A, B and C) consisting of 40 locations. The license will be valid for a period of 3 years, and may be renewed for further period of 3 years.

 

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