Insurance Brokers Association of India (IBAI) has opposed the possible move by the Insurance Regulatory and Development Authority (Irda) to allow the banks to have multiple tie-ups with insurers through bancassurance channel.
The insurance regulator has recently formed a six-member committee in May to look into the issue. The committee is likely to submit its report during the current month. Currently? regulations allow one bank selling the products of only one insurer under bancassurance channel.
Briefing the media on the issue in Mumbai on Friday, Bharat J Boda, president, IBAI, said that ?Losing out our business to banks is not our concern, rather we are worried about consumers? interest while taking up the issue.?
Contesting the premise that the move will help banks increase the penetration of insurance, he said that though the penetration in life insurance segment under the existing bancassurance system has risen three fold, whereas the penetration of non-life insurance remained stagnant at 0.6% of GDP since the sector was opened up eight years ago.
So, there was no reason to believe that the sector would gain by the proposed move, said Boda. The IBAI is all set to take up the issue before the regulators like Irda and the RBI to register their protest in near future.