In a move that will help insurance agents who want to float insurance marketing firms to distribute policies of multiple insurance companies, IRDAI has proposed to give relaxation to insurance marketing firms (IMFs) and expand their scope of work.
To start with, the insurance regulator has reduced the networth of IMFs from Rs.10 lakh to Rs.5 lakh.
Among some key proposals are
- To allow IMFs to operate in three districts within a state
- Principal Officers can distribute insurance policies on their own. Currently, IMFs have to appoint sales persons to distribute policies
- IMFs can distribute micro insurance, group policies, crop insurance and combi products
- Relaxation in eligibility criteria to become Principal Officer in IMF.
- If Principal Officer has undergone training program of insurance broker, there will be no additional examination or training.
A few months back, IRDAI had constituted a 10-member committee to review open architecture model in insurance distribution i.e IMF regulation.
Currently, IMFs can sell insurance policies of two life, two general and two health insurance companies. In addition, IMFs can also sell other financial products like mutual funds and pension products by floating an IMF, subject to respective regulatory approval.
Currently, there are 222 insurance marketing firms in India.