Govt. Proposes Insurance Act Amendments, Allowing Agents To Represent Multiple Insurers; Customers Stand To Benefit

The government has proposed certain amendments to the Insurance Act that will let insurance agents get into partnerships with multiple insurers across life and general (including health) insurance. At present, agents can tie up with only a single insurer from each category. If the proposal gets approval, the Insurance Regulatory and Development Authority of India (Irdai) would need to lay down a new set of regulations to avoid conflict of interest. Stakeholder feedback on the proposal has been invited until 10 December 2024. 

It is to be noted that the insurance industry depends heavily on agents for distribution and customer engagement. Not only do agents sell insurance policies, but they also provide advice, explaining the insurance products to the customer. Thus they help in building trust. In fact, agents also help customers with the claim process, which can often be cumbersome. 

How Customers Stand To Benefit 

Customers stand to benefit majorly if this proposal comes into effect. At present when a customer interacts with an insurance agent, they are limited to products offered by a single insurer. This does not give them an option to compare options. Now that agents will be able to represent multiple insurers, customers can choose among products from multiple insurers from a single agent. Customers will have more choices to find a product that matches their specific needs and budgets.  Earlier, if a customer was associated with a certain agent, he or she would end up buying life or health insurance from a single insurer, always. 

Also, this would mean increased competition among insurers and that is likely to lead to more competitive pricing. Not just better premiums, insurers will also be motivated to provide better features and competitive add-ons. Customers will thus be able to find policies that are not only cost-effective but also more suited to their requirements. Moreover, this will push insurers to focus more on their customer support. In the end, it will be a win-win situation for customers.