Irda shifts focus to distribution

To host maiden brainstorming session to improve the various channels of sale

The Insurance Regulatory and Development Authority (Irda) is undertaking a major initiative to boost distribution in the sector. On January 20, it will hold a meeting with 200 sector professionals to understand insurers’ needs.

A senior Irda official said the session would be organised by the Life and General Insurance Councils in Hyderabad, where officials would discuss distribution.

This session would deliberate on the need to revamp the channels that are presently selling insurance products. After this, new regulations could be formulated, said the official.

“This will be a crucial meeting. While the regulator has made attempts to introduce new channels, it is necessary to discuss whether those hold relevance,” said a senior official of a private life insurance company.

Insurance officials said they would discuss the viability of channels such as common service centres (CSCs), meant to be one-point contact centres for selling insurance. While there are about 1,00,000 CSCs in the country, not many (especially life insurers) have tied-up with these.

“We are not confident of the service standards of CSCs, since they are a new entity. Hence, we would clarify with the regulator during the session on what role CSCs will play in insurance distribution and the Dos and Don’ts of tying up,” said the chief actuary of a mid-size private life insurer.

CSCs would also provide information to consumers on all financial products other than insurance, such as mutual funds and other investment products. After taking the views and comments of insurers on it, the new model is expected to come into operation within the next one to two months. These CSCs would act as brokers and will sell products of multiple insurance companies.

CSC is part of the National e-Governance Plan. The Centre’s plan is to roll out at least 100,000 CSCs with a focus on rural areas. These CSCs are aimed at providing high quality and cost-effective video, voice and data content and services in the areas of e-governance, education, health, tele-medicine, entertainment and other private services.

Selling insurance online is likely to be another issue in the meeting. The chief executive of a large general insurance company said the need is to make the web aggregator channel more flexible. These aggregators offer comparisons of insurance products of different companies, after signing a partnership with the companies.