IRDAI Chairman T S Vijayan said that insurance marketing firms (IMF) can help reduce mis-selling of insurance policies. He was speaking to media at an industry event held recently in Mumbai.
Vijayan said that there were growing instances of mis-selling, particularly in the corporate agency model due to tie up model. Insurance marketing firms could address this issue as it allows intermediaries to distribute insurance policies of multiple insurers. Going forward, we expect more traction in this distribution model, said Vijayan. He said IMF could be a game changer in the insurance distribution space.
Vijayan further said that that open architecture model in insurance distribution has been gaining traction among advisers. He said that IRDAI is promoting IMF by organizing awareness campaigns on IMF for distributors.
IRDAI data shows that 30 new players have received licenses from IRDAI to float IMF in just eight months. As a result, the total number of IMFs has increased to 34 as on August 2016. In December 2015, there were only four insurance marketing firms.
Last year, 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.
These firms 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 to get IMF license.
Distributors can submit their IMF applications online on imf.irda.gov.in.