IRDA to allow banks to tie up with 2-3 insurance cos

Insurance sector regulator, IRDA, is considering whether to allow banks to tie-up with two-to-three insurance companies to sell their insurance products, a senior IRDA official said.     

Presently, banks cannot have agency tie-ups with more than one insurer.     

"Initially, we will be a little cautious...It (tie-ups of banks with insurance companies) can be two or three. We will then revisit the experience and come back," Insurance Regulatory and Development Authority (IRDA), Member (Actuary), R Kannan, told reporters here.     

Various life and general insurance companies have been asking IRDA to relax this (banks tie-up with one insurer) requirement.     

The regulator is currently reviewing the existing architecture of the Banacassurance model and has set-up a seven-member committee to study the subject.     

The agency distribution arrangements through banks is generally known as the 'Bancassurance' model.     

The regulator is definitely going to introduce an open architecture, Kannan said, adding that, "the question is how many tie-ups the banks can have with insurance companies."     

"It (banks' tie-up with two-to-three insurance companies) should be operationally feasible, administratively possible and at the  same time take care of policyholders' interests," he said.