IRDAI Chairman T.S. Vijayan said that open architecture model in insurance distribution may take time to pick up. He was speaking on the sidelines of 17th Annual Insurance Conference called ‘#FINCON2016’ organized by FICCI held in Mumbai recently.
Vijayan told Cafemutual that the insurance regulator has received only 4-5 applications from intermediaries to float insurance marketing firm (IMF). He said, “Due to lack of awareness about insurance marketing firm among distributors, it has not picked up well. We are working on this to remove the bottlenecks. In fact, we have started organizing awareness campaigns on IMF for distributors.”
Earlier in March, IRDAI had introduced a new distribution channel called IMF through which insurance distributors are allowed to tie up with multiple insurers so that they could offer a wider choice to investors.
To start with, the insurance regulator has allowed such distributors 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 the distribution business. Initially, the license will be issued for three years which has to be 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.
Distributors can submit their IMF applications online on imf.irda.gov.in.