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IRDAI has constituted a taskforce on bancassurance to check instances of mis-selling or force selling by bank employees.
Headed by J Meena Kumar, Executive Director (Life), IRDAI, the 16-member committee has representation from large banks SBI, HDFC and PNBs and insurance companies like New India, ICICI Lombard, Tata AIA Life, HDFC Life, Bajaj Allianz Life, Aditya Birla Health and Cholamandalam MS General.
Among key responsibilities apart from checking mis-selling by banks are:
• Study the effectiveness of existing bancassurance model and recommend ways to improve its efficiency
• Examine international best practices in this model and suggest suitable modification
• Any other relevant matter related to bancassurance
Acknowledging the role of banks in insurance distribution, IRDAI said, “Banks are engaged in the distribution of insurance products as corporate agent and as master policyholder subject to the applicable regulatory framework. While banks have the option to set up a separate legal entity for distribution of insurance products as Insurance brokers, till date, such option has not been exercised by banks.”
However, the insurance regulator feels that banks are yet to utilize their huge potential in insurance distribution space. It said, “Despite the large network of banks through their branches across length and breadth of the country, the contribution of bank as corporate agents was 6% of non-life premium and 17% of new business premium for life insurance in the year 2022-23. One of the ways of reaching the last mile and making available insurance products to the nook and corner of the country is leveraging the vast bank branch.”
