Banks, insurers lock horns over bancassurance

Our Economic Bureau

New Delhi, Jan 3: Differences between banks and insurance companies over distribution norms came to the fore on Thursday at a meeting convened by the Insurance Regulatory and Development Authority (Irda).

The meeting had been called to thrash out a number of issues concerning banks and distribution of insurance products by them.

The rules permit banks to distribute the products of only one life and one non-life insurance company. However, banks are lobbying for permission to sell the policies of more than one player each in the life and general insurance segments.

According to officials, bankers are contending that such a provision would enable them to better utilise their staff deployed in insurance sales and also reach out to a wider customer base by offering an array of insurance providers. Insurance companies, however, opposed the proposal. One insurer later likened the demand to brokerage. He said banks would in that case would be no different from brokers who have on the shelf a whole range of products.