Irdai unlikely to act against bancassurance despite mis-selling fears

Insurance regulator finds bancassurance mis-selling not alarming and rules out coercive curbs while continuing to advise insurers to list for transparency and governance

In a major relief to life insurance companies, especially those in the private sector, the Insurance Regulatory and Development Authority of India (Irdai) is not in favour of taking any coercive action against the bancassurance model of distribution as it believes that mis-selling through this channel is not as alarming as it has been made out to be, a source privy to the development said.

 

“…distribution cannot be mandated, it can only be facilitated”, the source said.

 

Since last year, there has been a lot of discussions around mis-selling of insurance products through the bancassurance channel, with the finance ministry,