Irda may allow banks to sell products of multiple insurers

In order to increase insurance penetration, the regulator Irda is contemplating allowing banks to sell products of more than one insurance firm.

"The regulator is considering to open up distribution channel... The final call by Irda will be taken soon," Life Insurance Council Secretary General SB Mathur said on the sidelines a conference of CEOs of insurance companies here.

As per the current practice, a bank is allowed to sell products of a life insurance company, a general and a health insurance firm.

There has been long pending demand from insurers for relaxing bank distribution channel.

To study distribution channels–agency, bancassurance, referrals, direct sales etc, the regulator had set up a 10-member committee, headed by former LIC chairman NM Govardhan in 2007.

The committee which submitted 60-page report in 2009, suggested various measures for increasing distribution.

Mathur also said the life insurers are expecting 15% rise in new business premium in the current fiscal.

The new business premium grew 14.5% to Rs 1,25,800 crore in 2010-11 from Rs 1,09,894 crore in the previous year.

Despite an uncertain environment the total premium of life insurance industry increased by 8% as compared to Rs 2,86,500 crore in the previous fiscal, he said.