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  • Insurance Insurance agents can work with multiple insurers: Finance Secretary

    Insurance agents can work with multiple insurers: Finance Secretary

    “With our proposal, agents can sell any product he wants,” said M Nagaraju, Secretary, Department of Finance.
    Team Cafemutual Feb 5, 2025

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    In a recent interview with CNBC Awaaz, Finance Secretary M Nagaraju said that the government will enable open architecture in insurance distribution by allowing agents to sell policies of multiple insurers.

    Earlier, the Department of Financial Services, GOI has proposed to omit the clause, which makes it mandatory for insurance agents to work with only one life, one health and one non-life insurer.

    With this, insurance agents would be allowed to work with multiple insurance companies soon.

    Nagaraju explained the major changes coming to India's insurance sector through the Union Budget. These changes focus on Foreign Direct Investment (FDI), rules for running insurance companies, and the proposed composite license that will allow all insurance types to be sold.

    Nagaraju expanded on the insurance licenses "Either you want to do life, general, or health. Whatever it is you want to do, you can do that. Single license or composite license." He continued "And the agent also, he can sell any product now he wants, once it is done." But Nagaraju made it clear that "The agent has to be trained. The agent has to be skilled."

    Nagaraju also pointed out that in 24 years, India has received only Rs. 82,000 crore in insurance FDI. There were many other strict rules that kept foreign companies away, like having only Indian board members and CEOs, and restrictions on taking money back home.

    Now that the government is changing these rules, Nagaraju said they expect huge FDI flows. The government understands that foreign companies want more say in running their business, and this is normal global practice.

    Here are the highlights from the discussion:

    • Despite raising the FDI limit to 50% in 2015 and 74% in 2021, foreign investment remained low 

    • The government is now easing these rules to make investing in India’s insurance sector more appealing

    • If an insurer wants to offer all three products, then their solvency position and capital will be seen separately

    Foreign insurers want control over their investments, including the ability to appoint their own leadership, which is a common global practice.

    Have a query or a doubt?
    Need a clarification or more information on an issue?
    Cafemutual welcomes all mutual fund and insurance related questions. So write in to us at newsdesk@cafemutual.com

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    5 Comments
    INSIGHTFUL INVESTORS · 1 week ago `
    This Move should be implemented in split second as Insurance Agents too crave for wide gamut of Product & Companies in their Portfolio. This should be implemented too fast. Agents are compelled to be with only one Company & are simply blindfolded & gets mundane by selling the repeated product of a company. Many leaves the company as there is no aspiration left. Now very few see this as a career as it is standalone & obsolete.
    Sham Kumar Saini · 1 week ago `
    No one is talking about customers. Govt of India, IRDAI, Insurance Companies and Foreign Investers are all interested and worried about ammending the rules to their whims and fancies but none is talking about benefits to the customers. Has FDI, opening up of Insurance Sector and setting up of IRDAI made Health Insurance, General Insurance affordable?
    Big No!
    And now for the ease and benefits of Private Insurance and Foreign Companies even Life Insurance has been made costly. Where are we heading in the name of reforms?
    High time to get back to realities.
    Reduce Premium Rates.
    Reduce Expences of Managements(EoM).
    Enhance Bonus Rates for better Returns.
    Make Products Worth Buying. Customers shall line up.
    Recruit, Train, Nurture and look after Insurance Agents/ Advisors better because it is Insurance Agent whose Face Value is considered while buying Insurance. Companies come later.
    Customers are face to face comfortable with Agents/ Advisors. Their Mutual Trust, Faith, Respect, and Quality Services are more important and necessary than FDI for profits!
    Bajrangi Chaubey · 1 week ago `
    Good decision if implemented.Good decisions are always withdrawn under pressure made by COMPANIES on regulator.Hope this will not be withdrawn and will soon be a reality.I am very much excited to work with multiple insurers.
    InvestAir Funds · 1 week ago `
    Lastly Govt. is doing something that will make Insurance a product that will not be sold but bought like Mutual Funds
    Suresh Bhura · 1 week ago
    I think you missed the word Mis - 'not Missold but bought"
    Reply
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