The Insurance Regulatory and Development Authority of India (Irda) is considering allowing life insurance companies to enter into tie-ups with more than one general insurance company for micro insurance business. | |
| "We have not accepted proposals for such tie-ups thus far, but we are considering making an exception by allowing life insurers to have more than one tie-up with general insurers," said C S Rao, chairman, Irda, on the sidelines of Insurance Brokers Association of India Conference 2006. |
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| Last year, Irda had issued micro-insurance regulations according to which a life insurance company can tie up with only one general insurance company. |
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| In case the permission is granted, the biggest beneficiary will be the public sector Life Insurance Corporation of India (LIC) which has major plans to foray into micro-insurance business. |
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| It plans to tie up with New India Assurance for better reach in the western zone, National Insurance in eastern zone, United India Insurance in Southern zone and Oriental Insurance in the Northern zone. |
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| The micro-insurance products will be a package policy of life and general insurance covers for the poor. |
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| The general insurance products will vary with insurers. They will be sold along with a life cover from LIC with minimum sum assured ranging from Rs 5000 to Rs 50,000. |
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| The general insurance companies will provide insurance policies for health, personal accident, hut and dwellings, cattle, plantation, fisheries, livestock, and weather. |
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| On a question of hiking mediclaim premium, Rao said, "We have told insurance companies that mediclaim policy needs to be honoured. In case insurers are making changes in terms and conditions of the policy they have to first file it with Irda. Though there is a provision of an increase in premium as mediclaim is an annual policy and I don't expect the premium to remain stable all the while, however there is no need for an increase in rates every year." |
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| Speaking about Irda's decision to not allow insurers to change the terms and conditions for next 15 months in a detariffed regime set to kickstart in January 2007, Rao said, "We have noticed considerable confusion in markets where detariffing has happened. Thus for now we felt that terms and conditions should be frozen." |
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| One of the regulatory challenges will be ensuring that companies maintain their solvency if they lower their rates and price cutting once detariffing happens. |
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| The suggestion of creating a motor insurance pool in a tariff free regime is in the course of being finalised and by October end, insurers will decide on the pool rate. |
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| Bharat J Boda, president, Insurance Brokers Association of India pointed out that this year, Irda requires filing of annual returns, however the portal remains inaccessible. To which Mr Rao replied that this is one of the infrastructure hurdles faced by Irda. |
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