IRDA mulling lead insurance model to increase penetration

MUMBAI: The insurance regulator today said it is mulling lead insurance model based on geography to enhance reach and cover lower strata of the society.

"IRDA has proposed the lead insurance model on the basis of geography, just like the banking industry," IRDA Chairman J Hari Narayan said here at an Assocham summit.

The regulator is awaiting feedback from the life insurance and general insurance council. In the banking sector, lead bank model is followed in specific geographies in order to give emphasis on availability of various banking services in one particular zone, which the regulator is considering to replicate.

On bancassurance, he said, one option is to have one agency system (one bank selling products of one insurance company) is as per the law, however, banks can work as insurance brokers to sell products of multiple insurance companies. Hari Narayan also stressed on rationalisation in commission structure, saying that management cost should be reduced.