The Life Insurance Corporation of India (LIC) is planning to forge an alliance with the four state-owned general insurance companies to jointly develop micro-insurance products affordable for the rural poor. | |
| The new Insurance Regulatory and Development Authority (Irda) regulations permit life insurance companies to offer non-life micro-insurance products, provided the life insurer has a tie-up with a non-life insurance company. |
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| Similarly, non-life insurance companies can also offer life products if they have a tie-up with a life insurer. |
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| "LIC would prefer to have an arrangement, preferably with all the government-owned general insurance companies, but a final decision would depend on Irda's views," T S Vijayan, managing director of LIC, told reporters on the sidelines of a seminar on corporate governance organised by the Indian Merchant's Chamber. |
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| LIC would be able to distribute micro-insurance policies through its existing agent network and will also appoint agents only to hawk micro"�insurance products. Besides servicing policies, the micro-insurance agents would also collect premium. |
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| Vijayan said LIC would have to rework its organisational network to make the business of micro-insurance cost-effective and also make it serve the target customer segment. |
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| The minimum and maximum cover for accident, health and endowment policies would range between Rs 5,000 to Rs 50,000 per policy. |
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| The remuneration or commission to agents would be a maximum of 10 per cent for single premium life product and 20 per cent for other products. For non-life products, the commission to micro-insurance agents would be upto 15 per cent of the premium. |
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| For issuing group policies, the total membership should be at least 20. Insurers have the discretion to fix agent commission within the overall limit applicable to individual policies. |
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