Insurance Marketing Firm (IMF) has received a tepid response from insurance intermediaries.
So far, IRDAI has granted IMF license to just four players – Teamhealth, Six Sigma Financial Solutions, BellWether and Futuristice Life.
Last month, T.S. Vijayan told Cafemutual on the sidelines of the FICCI event that the insurance regulator has received only 4-5 applications from intermediaries to float insurance marketing firm (IMF).
Vijayan said that open architecture model in insurance distribution may take time to pick up. He had 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.”
In March, IRDAI had introduced a new distribution channel called IMF through which insurance distributors were allowed to tie up with multiple insurers to offer 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 a distribution business. Initially, the license is 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.
Distributors can submit their IMF applications online on imf.irda.gov.in.