The Insurance Regulatory and Development Authority of India (Irdai) on Thursday said that it would soon come out with the final corporate agency norms under bancassurance.
The regulator also allowed banks to tie up with more than one insurer — from life, non-life and standalone health insurance segments. The move clears a grey area in bancassurance.
“We have allowed banks to tie up with insurers, to sell three products each from life, non-life and standalone health insurance. However, it is not mandatory and the same has been left to banks to take a call,” Irdai member (life), Nilesh Sathe, told reporters on the sidelines of the National Insurance Conclave-2015.
Clarifying on the Know Your Customer (KYC) norms, he said “all financial sector regulators in the country are working together to have a common KYC”. On the impact of increase in FDI cap in the insurance sector to 49%, Sathe said: “We have already received application from one foreign insurance company each, for life and non-life products. A number of global insurance brokers and reinsurance companies have approached us expressing their wish to open branches in India and we are looking into it.”
Irdai has also sought to clamp down on the misuse of existing provisions on claims settlement. It said policyholders, while renewing their policies, should not be denied the payment of sum assured in case of suicide within a year of reinstatement of the policy.
Existing norms say that policyholders can’t get claims if suicide is committed in the very first year of the commencement of the policy. However, Irdai has said that this norm cannot be utilised in case of renewal of policy.
“It has been observed that quite a few life insurers are involved in gross misuse of the norm by not giving the sum assured to the policyholder in case of reinstatement of policy after a lapse and policyholder is paid only premium refund,” Sathe said.
“We will not allow any of the life insurers to deprive policyholders of availing the claim amount in case he has already reinstated his policy after a lapse period and he commits suicide within 365 days of reinstatement of his policy,” Sathe said.