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Insurance marketing firms yet to widen services

IMF is an entity registered by the IRDAI to solicit or procure insurance products

marketing firms, which are licensed as a separate entity under the intermediary category, have stuck to pure soliciting or procuring products. While 44 marketing firms have been registered by the Regulatory and Development Authority of India (IRDAI), only five are involved in distribution of other financial products.

marketing firms are registered by the to solicit or procure products, to undertake service activities and also to distribute other financial products as specified in the regulations by employing individuals licensed to market, distribute and service such other financial products.

These entities can tie up with up to six companies. While this was mandatory earlier, the later decided that marketing firms need not compulsory tie up with two life, two general and two health companies. The regulator also said no company could restrict an marketing firm from having tie-ups with other companies.

marketing firms employ service providers to solicit or procure products. But an marketing firm is free to solicit or procure business from all over the country. To enable more service providers to join, the regulator has said that every provider employed by an marketing firm has to be paid a fixed monthly salary not lower than Rs 5,000.

While the endeavour was that agents would play an active role by becoming marketing firms, not many have come forward. The chief distribution officer of a mid-size private life insurer said the incentive structures were not attractive enough for agents to move into this channel on a large scale.

The has said the remuneration payable to the marketing firm by the insurer for solicitation of policies by service providers shall be treated on the same terms as applicable to brokers for existing products.

Since it is not mandatory to tie up with six insurers, not all marketing firms have entered into multiple tie-ups. Some have restricted themselves to one insurer in life, non-life and health while a few others have only tie-ups in one category. Insurers said while the new channel might help them acquire more business, some constraints were yet to be resolved.

For instance, the CEO of a life company said there were some issues related to the salesperson being a local of a district. He added it might not be feasible to find service providers in some locations.

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Business Standard
177 22
Business Standard

Insurance marketing firms yet to widen services

IMF is an entity registered by the IRDAI to solicit or procure insurance products

M Saraswathy  |  Mumbai 

Image via Shutterstock
Image via Shutterstock

marketing firms, which are licensed as a separate entity under the intermediary category, have stuck to pure soliciting or procuring products. While 44 marketing firms have been registered by the Regulatory and Development Authority of India (IRDAI), only five are involved in distribution of other financial products.

marketing firms are registered by the to solicit or procure products, to undertake service activities and also to distribute other financial products as specified in the regulations by employing individuals licensed to market, distribute and service such other financial products.


These entities can tie up with up to six companies. While this was mandatory earlier, the later decided that marketing firms need not compulsory tie up with two life, two general and two health companies. The regulator also said no company could restrict an marketing firm from having tie-ups with other companies.

marketing firms employ service providers to solicit or procure products. But an marketing firm is free to solicit or procure business from all over the country. To enable more service providers to join, the regulator has said that every provider employed by an marketing firm has to be paid a fixed monthly salary not lower than Rs 5,000.

While the endeavour was that agents would play an active role by becoming marketing firms, not many have come forward. The chief distribution officer of a mid-size private life insurer said the incentive structures were not attractive enough for agents to move into this channel on a large scale.

The has said the remuneration payable to the marketing firm by the insurer for solicitation of policies by service providers shall be treated on the same terms as applicable to brokers for existing products.

Since it is not mandatory to tie up with six insurers, not all marketing firms have entered into multiple tie-ups. Some have restricted themselves to one insurer in life, non-life and health while a few others have only tie-ups in one category. Insurers said while the new channel might help them acquire more business, some constraints were yet to be resolved.

For instance, the CEO of a life company said there were some issues related to the salesperson being a local of a district. He added it might not be feasible to find service providers in some locations.

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Insurance marketing firms yet to widen services

IMF is an entity registered by the IRDAI to solicit or procure insurance products

IMF is an entity registered by the IRDAI to solicit or procure insurance products
marketing firms, which are licensed as a separate entity under the intermediary category, have stuck to pure soliciting or procuring products. While 44 marketing firms have been registered by the Regulatory and Development Authority of India (IRDAI), only five are involved in distribution of other financial products.

marketing firms are registered by the to solicit or procure products, to undertake service activities and also to distribute other financial products as specified in the regulations by employing individuals licensed to market, distribute and service such other financial products.

These entities can tie up with up to six companies. While this was mandatory earlier, the later decided that marketing firms need not compulsory tie up with two life, two general and two health companies. The regulator also said no company could restrict an marketing firm from having tie-ups with other companies.

marketing firms employ service providers to solicit or procure products. But an marketing firm is free to solicit or procure business from all over the country. To enable more service providers to join, the regulator has said that every provider employed by an marketing firm has to be paid a fixed monthly salary not lower than Rs 5,000.

While the endeavour was that agents would play an active role by becoming marketing firms, not many have come forward. The chief distribution officer of a mid-size private life insurer said the incentive structures were not attractive enough for agents to move into this channel on a large scale.

The has said the remuneration payable to the marketing firm by the insurer for solicitation of policies by service providers shall be treated on the same terms as applicable to brokers for existing products.

Since it is not mandatory to tie up with six insurers, not all marketing firms have entered into multiple tie-ups. Some have restricted themselves to one insurer in life, non-life and health while a few others have only tie-ups in one category. Insurers said while the new channel might help them acquire more business, some constraints were yet to be resolved.

For instance, the CEO of a life company said there were some issues related to the salesperson being a local of a district. He added it might not be feasible to find service providers in some locations.
image
Business Standard
177 22

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