RBI might review the sale strategy used by banks to sell insurance policies. RBI is reportedly set to discuss this issue in a forthcoming meeting with bank chiefs on risk-based supervision next week.
“It’s a good initiative that the regulators are thinking of because it will curb mis-selling at initial stages itself,” said a top official of a private life insurance company.
This assumes significance as IRDA is also considering allowing banks to sell policies of multiple companies where a major concern of the insurance regulator would be to ensure that banks do not end up selling products based purely on the commission payouts.
The report says that banks have been finding it tough to sell life insurance following the loss of customer faith in the industry.
Reportedly, commissions in life insurance are very high and the bank stands to earn up to 20 percent of the premium amount.