There is some good news for insurance intermediaries. IRDAI is considering allowing Point of Sales Persons (PoSPs) who are appointed by agents and insurers to distribute life insurance policies, said Pournima Gupte, Member Actuary, IRDAI. She was speaking at the 18th CII Insurance Summit held recently in Mumbai.
So far, PoSPs are allowed to distribute plain vanilla non-life products having standardized features. These products are typically pre-underwritten, covering segments like motor insurance - both comprehensive and third party, personal accident policy, travel insurance, home insurance, health insurance and other policies notified by IRDAI. Pre-underwritten policies are like social security schemes having pre-defined coverage, risks and premium.
IRDAI norms allow insurance companies and insurance intermediaries like agents, brokers and insurance marketing firms to appoint their sales representatives across the country to solicit insurance policies.
According to the guidelines, agents can appoint a matriculate as their sales representative to solicit insurance policies anywhere in India. However, such PoSPs should have at least Aadhaar card or PAN card as a proof of identity. PoSPs are required to complete online training and pass an examination.Insurance companies or agents have to bear expenses incurred on this exercise.
Though the guidelines don’t offer any clarity on the remuneration for such representatives, T.S. Vijayan, IRDAI Chairman had told Cafemutual on the sidelines of a recent event that the board of trustees of insurance companies will have to take a call on fixing the remuneration of PoSPs.
Experts say that this new distribution channel could be a cost effective way to grow business. It can help agents expand their distribution footprint across the country, thereby helping increase the insurance penetration in India.