There is some good news for insurance intermediaries. According to an IRDAI circular, Point of Sales Person (PoSPs) can distribute government approved insurance schemes like Pradhan Mantri Jeevan Suraksha Bima Yojana, Pradhan Mantri Jeevan Jyoti Yojana and other social security schemes.
In addition, the insurance regulator has allowed PoSPs to distributed cattle/livestock insurance, agriculture pump set insurance, fire insurance and government backed crop insurance like Pradhan Mantri Fasal Bima Yojana, Weather Based Crop Insurance Scheme and Coconut Palm Insurance Scheme in rural areas.
IRDAI norms allow insurance companies and insurance intermediaries like agents, brokers and insurance marketing firms to appoint their sales representatives across the country to solicit insurance policies.
According to the guidelines, agents can appoint a matriculate as their sales representative to solicit insurance policies anywhere in India. However, such PoSPs should have at least Aadhaar card or PAN card as a proof of identity. PoSPs are required to complete online training and pass an examination.
Insurance companies or agents have to bear expenses incurred on this exercise. So far, PoSPs are allowed to distribute plain vanilla non-life products having standardized features. These products are typically pre-underwritten, covering segments like motor insurance - both comprehensive and third party, personal accident policy, travel insurance, home insurance, health insurance and other policies notified by IRDAI. Pre-underwritten policies are like social security schemes having pre-defined coverage, risks and premium.
In order to prevent mis-selling under this new distribution channel, policies sold through PoSPs will come with identification number captured through Aadhaar or PAN. However, insurers or insurance agents will be liable for any misconduct of their sales representatives and can be penalized.
Though the guidelines don’t offer any clarity on the remuneration for such representatives, T.S. Vijayan, IRDAI Chairman had told Cafemutual on the sidelines of a recent event that the board of trustees of insurance companies will have to take a call on fixing the remuneration of PoSPs.
Experts say that this new distribution channel could be a cost effective way to grow business. It can help agents expand their distribution footprint across the country, thereby helping increase the insurance penetration in India.
