Common Service Centres (CSCs) across India will soon be aiding the insurance companies in India in selling their products. In a meeting held today between officials of Insurance Regulatory and Development Authority (Irda) and insurance industry, the structure and process of implementation of CSCs model in insurance was discussed. In the next few days, Irda will bring out detailed guidelines for insurers to tie-up with the CSCs. Industry officials who attended the meeting said that Irda officials including chairman TS Vijayan and Member (Distribution) DD Singh presented their views on the advantages of this model. Presentations were made on the workability of the model and the manner in which it will be brought into operation. These presentations were made in the presence of chief executives of life and general insurance companies and representatives of the life and general insurance council. Sources indicated that Irda will bring out a notification on the same in the next 15 to 20 days. After taking the views and comments of insurers on this notification, the new model of CSCs is expected to come into operation within the next one to two months.
These CSCs would be similar to brokers, and would be able to sell products of multiple insurance companies. The CSC is a strategic cornerstone of the National e-Governance Plan (NeGP). The CSCs are aimed to provide high quality and cost-effective video, voice and data content and services, in the areas of e-governance, education, health, tele-medicine, entertainment as well as other private services. A highlight of the CSCs is that it will offer web-enabled e-governance services in rural areas, including application forms, certificates, and utility payments such as electricity, telephone and water bills. The centre had planned to roll-out out over 1,00,000 CSCs across the country with a focus on the rural areas. These CSCs will deliver services in the areas of telecom, agriculture, health, education, entertainment, FMCG products, banking and financial services (insurance), utility payments among others. Each CSC is expected to serve a cluster of 6-7 villages, thereby covering more than six lakh villages across India. The Public Private Partnership (PPP) model of the CSC scheme envisages a 3-tier structure consisting of the CSC operator (called Village Level Entrepreneur or VLE); the Service Centre Agency (SCA), that will be responsible for a division of 500-1,000 CSCs; and a State Designated Agency (SDA) identified by the State Government responsible for managing the implementation in the entire State. Industry sources said that CSCs will be authorised to sell life and non-life policies after its officials undergo the mandatory examination conducted by the Insurance Institute of India. "This will provide the much needed boost to insurance penetration in India. This model can prove to be cost-efficient and quick, if implemented in the appropriate manner," said a senior insurance executive. According to the Irda Annual Report for 2011-12, insurance penetration, which surged consistently till 2009, slipped for the consecutive second year and stood at 4.1% in 2011, compared to 5.1% in 2010. Insurance penetration is measured as the percentage of insurance premium to gross domestic product.