Those opening accounts in banks or availing of other banking services have often been forced to buy insurance products. That will no longer be the case, as the Insurance Regulatory and Development Authority of India (Irdai), in its regulations on corporate agent registration, has said no customer can be asked to buy insurance mandatorily by corporate agents. “Where the insurance is sold as an ancillary product along with a principal business product, the corporate agent or its shareholder or its associates shall not compel the buyer of the principal business product to necessarily buy the insurance product through it,” Irdai said. It added the chief executive officer and the chief financial officer of the entity have to give a declaration saying they haven’t forced customers to buy insurance through them alone. The regulator has allowed corporate agents, including banks, to tie up with up to three life, three non-life and three standalone health insurers. They can also apply as corporate agents only for life, non-life or health segments and sell products of up to three insurers in that category. In the general insurance category, they cannot procure and service products with a sum assured of more than Rs 5 crore per risk for all insurance. Insurance companies not promoted by banks are hoping banks offer more choice to customers. Anup Rau, chief executive of Reliance Life Insurance, said, “While we hope opening of the bank channel to more insurers will be mandatory, this is a good start.
We are optimistic that people would be provided more choice by banks.”
Timeline: How the bancassurance saga unfolded December 2013: February 2014: January 2015: March 2015: June 2015: September 2015:
Every corporate agent (like banks ) also has to be disclose its plan of adopting open architecture and its approach for the same. This, said insurers, would mean that all banks would have to tie-up with multiple insurers in the near future. Also, corporate agents will not be allowed to solicit unit-linked insurance plans (ULIPs) of non-single premium type for annualised premiums exceeding Rs 50,000 over telephonic mode (voice as well as SMS).