The Insurance Regulatory and Development Authority of India (IRDAI) is setting up a task force to streamline and improve the country’s bancassurance.
This regulator believes the country’s extensive bank network can be used to expand insurance accessibility, particularly those who are underserved regions, in line with its ‘Insurance for all by 2047’ strategy.
In the 2022-23 financial year, contributions through the bancassurance channel were 5.93% of non-life premiums and 17.44% of new business premiums for life insurance.
In a circular, the IRDAI said that strengthening the bancassurance channel further is “One of the ways of reaching the last mile and making available insurance products to the nook and corner of the country is leveraging the vast bank branch network.”
The task force will study the effectiveness of the current Bancassurance model and will consider international best practices in order to propose ways to make the channel more effective.
The taskforce has also been charged with the responsibility of examining other crucial areas, including regulatory stipulations and market conduct. This comes in the light of an observed increase in the number of misselling and forced selling complaints related to this distribution model in India.
Smt. J. Meena Kumari, Executive Director of IRDAI, will chair the Taskforce. Along with other members from IRDAI, there will be representatives from banks and insurers —including the State Bank of India, HDFC Bank, PNB, New India Assurance Company Limited, ICICI Lombard General Insurance Company Limited, and Tata AIA Life Insurance Company Limited.
The committee said it will aim to present its recommendations by the end of 2023.