IRDAI Chairman T. S. Vijayan said that the insurance regulator is planning to introduce a new distribution model called over-the-counter (OTC) insurance through which plain vanilla products having standardized features will be distributed.
He was speaking on the sidelines of the launch of Registry of Hospital in Network of Insurance (ROHINI) organized by Insurance Information Bureau of India (IIBI) held in Mumbai yesterday.
“Just like savings bank accounts which are easy to understand, we are working with insurers to introduce simple products with standard features that would be distributed over-the-counter. These products will have pre-defined benefits such as Pradhan Mantri Bima Yojana and Pradhan Mantri Suraksha Yojana.”
Vijayan clarified that IRDAI will not allow ULIPs and endowment policies to be sold through this route.
Though the chairman didn’t give details on the distribution structure, he said that the insurance regulator may allow insurers or point of sales to distribute these products. He said, “As of now, we have not decided on the distribution structure. However, the commission to distributors on these policies should be at par with or within the expense ratio.”