Multiple Insurer Affiliations for Banks by IRDA

Industry experts say that this move will ensure the banks continue to expand their reach by venturing with insurance companies
Insurance Regulatory Development Authority of India (IRDAI) is contemplating over a
superior choice to articulate Bancassurance- the process of involvement of banks for the sale of insurance related products.

Read more
Get ₹1 Cr. Life Cover at just ₹449/month+
Term Insurance plans
Save more with upto 10% discount
Covers COVID-19
Policybazaar is
Certified platinum Partner for
Claim Settled

+Tax benefit is subject to changes in tax laws. +Standard T&C Apply

++Discount is offered by the insurance company as approved by IRDAI for the product under File & Use guidelines

Get ₹1 Cr. Life Cover at just ₹449/month+
View plans
Please wait. We Are Processing..
Get Updates on WhatsApp
By clicking on "View plans" you agree to our Privacy Policy and Terms of use
We are rated
58.9 million
26.4 million

Banks will consider affiliations with multiple insurers in the life insurance, non-life insurance, as well as independent health insurance sectors. Industry experts believe that this positive shift will now encourage banks to expand their operations, with their new business tie-ups with the insurer companies in newer regions of the country.

Sectoral sources also quoted that regulators seeking to expand their networks will now collaborate with insurers who are new in their networks.

“Simultaneous alliances with several insurers will now be encouraged as the bank regulators no longer intend to have an affiliation with a single insurer in each domain of life, non-life and independent health insurers,” states a private sector’s head of distribution life insurer.

Statistical reports from a Reliance Life’s presentation quotes that from 40 lakhs accounts in the public sector banks have only 1% insurance affiliations. Yet, it also states that with just an increase of 15% penetration of insurance affiliation, public sector banks can generate more than Rs. 60,000 crores worth of premium in life insurance in the coming five years.

IRDAI’s initial proposed several times to consider Bancassurance with an open architecture. Thus, banks can collaborate with a single insurer in each of its regional networks. However, due to constant population migration, banks disregarded this architecture on the grounds of confusion. Regulators also had proposed later to the banks to become insurance brokers, but none of its proposals have worked out so far, and this new proposal is a hope to revive both the banking and insurance sectors.

The recent regulations issued by the Reserve Bank of India (RBI) have enabled the banking sector to work as insurance brokers. The ratio of margins set by the banks to operate, as insurance brokers are weighted (capital-to-risk) assets to be 10% minimum to a maximum of 3% for non-performing assets. Furthermore, RBI limited the bank’s net worth to Rs. 1,000 crores.

Reliance Life’s study quoted the market size for Bancassurance to be Rs 9,500 crores (2013-14) for individual segments. Substantial growth is projected for the financial year 2015 driven by Unit Linked Insurance Products (ULIPs).

The recent authorities’ states that brokers and corporate agents have now become intermediaries for insurance companies however, previously, only ‘brokers’ were defined with ‘agents’ referring to corporate agents.

Authorization to banks to work as corporate agents has been given by IRDAI enabling sale of multiple insurers’ products through them without being termed as ‘brokers’.

Banks had a major roadblock while joint venturing with insurance companies as ‘partners’ in agreement. However, expert sources also suggested that the roadblock can be cleared once banks are sufficiently galvanized to tie-up with multiple insurers then they would be more open to following the route.

India’s insurance giant, The LIC (Life Insurance Corporation of India), is another obstacle as there would be a high possibility of speedy tie-ups with it. The CEO of a huge life insurance company stated that banks would be pushing the envelope further to affiliate with LIC due to its countrywide network presence and a strong business base.

“If all banks were to affiliate only with LIC, this would impact the other insurers who do not have banking affiliations adversely. Therefore, a medium is being set up where there would be no or lesser scope for conflict and multiple banks will be restricted to affiliate with the same lineage of high profit, high premium-making insurers,” he stated.

(Source: This article has been adapted from the article "IRDAI considering multiple insurer tie-ups for banks" that appeared on March 10, 2015 in

Types of Term Plans

Life insurance articles

Recent Articles
Popular Articles
Post Office Gram Suraksha Scheme Calculator

27 Jun 2022

A Post Office Gram Suraksha Scheme calculator is a useful online...
Read more
What happens if you stop paying life insurance premiums?

03 Jun 2022

Buying the best life insurance plan is a wise and learned...
Read more
Postal life Insurance Tax Benefits

26 May 2022

Postal Life Insurance is the oldest life insurer in the country...
Read more
How to Download PLI Statement Online?

24 May 2022

PLI or Postal Life Insurance was an initiative originally...
Read more
Is Life Insurance an Investment?

24 May 2022

The thumb rule to building wealth is to invest your money in...
Read more
How to Check LIC Policy Status, Details, Statement via Online/SMS/Call
Last year, Mr. Rajiv Verma bought a Child LIC policy to provide financial security for his kid's future. However...
Read more
SBI Life Insurance 50,000 per year Plan for 5 Years
Life insurance is not only about the financial protection of the family but also about working for life’s...
Read more
How to Cancel SBI Life Insurance Policy?
As per the Insurance Regulatory and Development Authority, you can cancel a life insurance policy taken within 15...
Read more
Post Office Gram Suraksha Scheme Calculator
A Post Office Gram Suraksha Scheme calculator is a useful online tool that can be accessed free of cost. It helps...
Read more
PLI Surrender Value Calculator
PLI Surrender Value Calculators have proven to be one of the simple tools for digitally savvy customers. PLI...
Read more

View Plans
Download the Policybazaar app
to manage all your insurance needs.