One of our readers wrote to us with this query:
I would like to understand if I can work with multiple brokers after obtaining point of sales representatives (PoSPs) license and distribute policies of multiple insurance companies.
Jayaraman Jaikumar via email
Dear Jaikumar,
Currently, IRDAI norms do not allow point of sales representatives (PoSPs) to work with multiple brokers or insurance companies. However, you can change your broker by obtaining NOC but it is a very cumbersome process.
PoSPs can solicit term insurance, non-linked traditional policies like money back and endowment, health insurance, immediate annuities and micro insurance products. Simply put, sales representatives can solicit most policies other than market-linked products like ULIPs.
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.
However, if you opt to become PoSPs for insurance companies or agents, you will have to sell insurance policies of tied companies. Ideally, you should become PoSPs for insurance brokers to sell policies of multiple insurance companies.
Policy features solicited by point of sales representatives:
Pure term
Minimum and maximum entry age limit: 18 to 65 years
Policy term: Minimum 5 years
Sum assured: No limit but it should be in the multiples of Rs.50000. However, PoSPs are allowed to sell term policies which do not insist for medical underwriting. Currently, only ICICI Prudential offers such a policy.
Non-linked traditional policies
Maximum age at maturity: Up to 65 years
Policy term: Minimum 5 years and maximum 20 years
Sum assured: Up to Rs.10 lakh
Immediate annuity
Entry age: Minimum 40 years and maximum 70 years
Mode of premium: Single premium only
Death benefit: Return of purchase price
Health policy
Age at entry: minimum 90 days
Sum insured: Maximum Rs.5 lakh under individual and family floater plan.
Motor Insurance
All vehicles with insured declared vehicles of up to Rs.50 lakh
Remuneration
While PoSPs working directly with insurer get commission in line with other distributors like agents and brokers, PoSPs working with a broker have to enter into a legal agreement on commission sharing. There are no specific norms from IRDAI; however, most brokers pass on 80-85% of commission they receive from insurance companies to PoSPs.