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IRDAI Approves Banks to Associate with Multiple Insurers

The Insurance Regulatory and Development Authority of India (IRDAI) has recently approved banks to associate with multiple insurers to sell products from life, non-life, and independent health insurance sectors. However, it is on the bank’s discretion whether to utilize this opportunity or not. In due course of time, IRDAI will lay down the guidelines on bank assurance.

During an insurance summit held by Duns & Bradstreet, Nilesh Sathe, IRDAI Member (Life), told reporters, “IRDAI has permitted the banks to utilize the opportunity to form JV with multiple insurers to sell life, non-life, and independent health insurance products. However, the decision to proceed with this opportunity solely lies with individual banks.” 

He further alleged, “We have observed that a few life insurance companies misuse the prescribed terms and conditions to avoid rendering the sum assured to the policyholder in event of reinstatement of policy after a lapse, only the only premium is refunded to the policyholder.” 

In an effort to control the abuse of existing terms and conditions on claims settlement, IRDAI attempts to coerce the insurers to pay the sum assured to the policyholders who renew their policy but commit suicide within the first year of reinstatement of policy. Prevailing norms prohibit the policyholder to receive claims in such a circumstance.     

Source: This news was published on August 13, 2015 in timesofindia.indiatimes.com under the title: “IRDAI allows banks to tie up with more than one insurer”