Shop policies of multiple insurers from same bank

KOLKATA: Your banker may be allowed to sell life and general covers from a host of insurance companies and offer you a wider choice to suit your insurance requirements. This is not the case now, since Insurance Regulatory and Development Authority (IRDA) does not allow a bank to tie up with more than one life and one general
insurance company.

���Currently, a bank cannot tie up with more than one insurer, each in life and non-life segments. Currently, we are studying the option of allowing banks to tie up with more than one insurer,��� IRDA chairman CS Rao told ET.

���Typically, banks act as corporate agents for insurance companies and are now treated at par with other corporate agents. Nevertheless, they are financial institutions and are regulated by the Reserve Bank of India. Hence, we may consider allowing them to tie up with more than one insurer,��� he added.

���Issues like commission structure and treatment of non-bank corporate agents vis-a-vis banks as corporate agents also need to be critically examined. A final decision will be taken only after we have critically examined all aspects of this possibility,��� explained Mr Rao.

Sources close to the development said that Indian Bank���s Association (IBA) has recently requested IRDA to allow multiple tie-ups. Mr Rao, however, clarified that IRDA has not yet allowed multiple tie-ups for banks.

���The insurers, both life and general, have been putting a case for multiple tie-ups for quite sometime to offer a wider choice to its customers,��� said a senior official from a life insurance company.

Interestingly, bancassurance contributes only a small portion of the total premium income of insurers. In insurance parlance, bancassurance is referred to the practice of banks selling insurance products. ���As multiple tie-ups are allowed, bancassurance���s contribution to the total premium income is likely to increase,��� said the official.