IRDAI Chairman T.S. Vijayan has urged agents to appoint point of sales persons (PoSPs) to expand their footprint. He spoke to Cafemutual briefly on the sidelines of ASSOCHAM 9th Global Insurance Summit held recently in Mumbai.
Vijayan said that the initial response on appointment of point of sales persons has been encouraging. He said that many non-life insurance companies have already appointed their point of sales representatives.
He further said that IRDAI is considering allowing PoSPs to distribute life insurance policies. He said, “We are about to finalize guidelines on what kind of life policies could be distributed by this channel. To start with, we are considering allowing simple life policies just in line with Prandhan Mantri Jeevan Jyoti Yojana.”
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.
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 insurance penetration in India.