Irda chief will consider all views on bancassurance

Even as the Reserve Bank of India (RBI) has raised questions on the draft bancassurance norms, Insurance Regulatory and Development Authority (Irda) Chairman J Hari Narayan on Friday said the authority would consider all views before finalising the rules.

“We are considering all the representations and refining the regulation. Later this month, an insurance advisory committee would be convened to consider bancassurance and few other regulations,” he said, adding Irda aimed to bring out the final bancassurance guidelines by the first week of February.

In its report on financial stability, RBI had said the proposal to allow banks to become insurance brokers might lead to a conflict of interest in case the bank was also a promoter of an insurance company.

On the different views on the issue, he said banks should be allowed to act as agents for more than one insurer. He, however, added according to the Insurance Act, a distribution entity could be an agent only on a 1:1 basis. He said Irda had proposed a zonal model in which a bank could tie up with partners for each zone. “Companies said they wanted to operate as agents to multiple companies across India. Under the current law, it is possible. But they need to become brokers, not agents. We have no objection to them being agents,” he said.

Irda wanted to provide flexibility for banks he said, adding it would be up to banks to take a decision.