Insurance Marketing Firm (IMF) has received a lackluster response from insurance intermediaries.
So far, IRDAI has granted IMF license to only one player, said Nilesh Sathe, Member (Life), IRDAI on the sidelines of 5th CII Financial Distribution Summit recently held in Mumbai.
Earlier this year, T S Vijayan had told Cafemutual that the insurance regulator had received only 4-5 applications from intermediaries to float IMF. He had said, “We are evaluating what went wrong and why IMF is not picking up. We have asked insurance companies to give their feedback on this issue in order to remove the bottlenecks.”
In March, IRDAI had introduced a new distribution channel called IMF through which insurance distributors were allowed to tie up with multiple insurers to enable a wider choice to investors. To start with, such distributors are allowed to sell insurance policies of two life, two general and two standalone health insurers.
In addition, agents can sell other financial products like mutual funds and pension products by floating an IMF, subject to respective regulatory approval. Existing insurance agents will have to surrender their agency license and pass an IMF examination.
Also, the applicant should have a net worth Rs.10 lakh for floating its distribution business. Initially, the license will be issued for three years which can be renewed 90 days prior to expiry. IMF will be required to possess professional indemnity insurance cover of at least Rs.10 lakh. Distributors have to cough up a non-refundable fee of Rs.5,000 along with the application form.
Earlier, through a press release, T S Vijayan, Chairman, IRDAI said, “The IMF is an entity registered by the IRDAI to solicit or procure insurance products, to undertake insurance service activities and also to distribute other financial products as specified in the regulations by employing individuals licensed to market, distribute and service such other financial products. “
Distributors can submit their IMF applications online on imf.irda.gov.in.