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Insurance Regulatory and Development Authority (Irda) Chairman T S Vijayan took over at a time when insurers were reeling under the effects of the twin issues of under-penetration and dropping premiums. One year later, while the insurance companies are grappling with low penetration concerns, the regulator has taken additional steps to ensure that distribution channels are strengthened to deepen insurance reach. A look at the key reforms initiated by the Irda chairman and their impact:
OPENING UP BANCASSURANCE
- The corporate agency channel enabled banks to tie up with one life, one non-life and one health insurer. Irda also allowed multiple bank tie-ups through broker model
- Finance ministry has directed public sector banks to become brokers
- New guidelines for traditional life insurance policies, after a delay, implemented from Jan 1, 2014
- Life insurers had new products by October; Irda allowed them to continue with old policies till Jan
- Insurers requested a premium hike of 50-60 per cent hike in third-party (TP) engagement for FY14. Other stakeholders requested a marginal hike; Irda increased premiums by 20-30%
- For FY15, proposed hike in TP premium was as high as 137 per cent
- For the first time in many years, a drop in premiums was proposed for three-wheelers due to lower claims
- After recording a 6.3% drop in new business premium in FY13, this financial year (till December), the segment saw 22% growth
- Pass marks to qualify as agent reduced to 35 per cent from 50 per cent
- Insurers given freedom to decide on persistency requirements for individual agents during licence renewals
- Irda enabled insurers to allow electronic issuance of policies
- Insurers to tie up with insurance repositories to digitise insurance policies
- E-policies aim to save above Rs 80 crore for insurers annually
- Misselling: More than 3,00,000 complaints had been filed till March 31, 2013, in life insurance
- Penetration: Insurance penetration stood at 3.96 per cent, while insurance density stood at $53.2 for 2012
