IRDAI Proposes To Raise Cap On Tie-Ups For Corporate Agents, Insurance Marketing Firms

The insurance regulator has proposed to increase the maximum number of tie-ups for corporate agents and insurance marketing firms to widen the reach and access of the industry.

The Insurance Regulatory and Development Authority of India has reviewed the IRDAI (Registration of Corporate Agents) Regulations, 2015, and IRDAI (Registration of Insurance Marketing Firm) Regulations, 2015 to raise the limit on tie-ups, it said in a draft notification dated Aug. 3.

Accordingly, the draft proposes to increase the limit on tie-ups with insurers for corporate agents, from the existing three for each category of insurance to nine for all categories.

It has also proposed to increase the limit of tie-ups with insurers for insurance marketing firms that engage insurance sales persons for soliciting and procuring insurance products, from the existing two for all insurer categories—including life, general and health—to six.

With this measure, the regulator aims to facilitate "open architecture which will enable the prospects and policyholders to have wider access in purchasing insurance and also to enhance the reach of insurance to every nook and corner of the country", it said.

IRDAI is seeking comments and suggestions on the proposed notification till Aug. 24.

The insurance regulator has been announcing steps towards simplifying compliance for insurance companies, in a way that enhances ease-of-business and increases insurance penetration.

Earlier, the regulator introduced 'use and file' provisions for life and general insurance products, whereby the companies could file the product after selling it.

It also proposed a single-cap of management expenses for general and health insurance companies, and simplified caps for life insurance companies—specifically, small life insurers with up to 10 years of operation—by recommending a flat additional allowance of 5% over the prescribed limits.

IRDAI has suggested provisions for additional management expense allowance of 10% towards promotional expenses of schemes, including the Pradhan Mantri Jeevan Jyoti Bima Yojana, Pradhan Mantri Suraksha Bima Yojana, Pradhan Mantri Jan Arogya Yojana and Pradhan Mantri Fasal Bima Yojana to enable affordable and inclusive insurance penetration across the country.

Additional allowances towards insurtech and Indian Accounting Standards have been proposed to align with the changing landscape and aid insurance penetration.

Last month, the IRDAI introduced usage-based own damage motor policies in public interest, and eased norms for onboarding hospitals under health insurance to widen hospital options for cashless claims by policyholders.