Page 13 - Insurance Times September 2015 SAMPLE
P. 13
full-time members, it is ensuring that all panies will be finalized. This will decide Impact of New norms on Policy
the new laws are brought out in time how an Indian insurance firm will run, Holders
so that we have adequate time to adapt the composition of its board and top
to the new norms", said by the CEO of management and what are the rights 4 No claim rejection after three years:
a large private life insurer. given to the joint venture partners. After three years of a policy being
Several foreign joint venture partners in force, the claims cannot be re-
However, there are divergent views on jected under any circumstance.
some areas such as expense manage- had expressed their discontent on the Hence, customers won't have to
ment and claims rejection. For instance, restriction of their rights in board ap- wait for the claim to be approved.
the new Act says no claim, even if pointment and voting for strategic de-
fraudulent, can be rejected after three cisions. Insurers said that the regulator 4 Agent remuneration to be more
years. Insurers say that fraudsters will would take a middle path to ensure that balanced:
take advantage of these norms. the rights of both partners in an insur-
ance venture were protected. Agent commission, deducted heavily
Similarly, a new compensation and in- from the first-year premium, will
centive structure will be brought out for now be more balanced towards sec-
agents, which might impact the outgo ond, third and fourth year. More
from customer premiums. Insurers also customer premium will go towards
don't agree with the regulator's view saving/investment component.
that fixed remuneration would reduce
agent attrition. According to sources 4 Solvency ratio higher for some prod-
the draft norms on agent commissions ucts:
will be brought out in a few weeks. Since insurers would have to main-
tain higher capital for products such
By December, the laws on Indian Man- as group health, this would result in
agement and Control of Insurance Com- higher premiums.
IRDAI puts a check on bancassurance to curb mis-sale Need for Tech-based
The Insurance Regulatory and Devel- should be extra cautious to ensure that crop insurance solutions:
opment Authority of India has put no product is forcefully sold. This would
norms against forced selling of insur- be part of the regulations on registra- IRDAI
ance policies by banks. In a recent tion of corporate agents.
meeting, IRDAI decided to seek an un- With the growing demand of tech-
dertaking from the CEO The head of a private life insurer said nology-based changes to make crop
and the Chief Financial Of- that there have been in- insurance full proof the regulator
ficer (CFO) of the corpo- stances of banks trying to has sent communication to the
rate agent (including persuade customers to buy State Governments of Madhya
banks) that there is no an insurance product. "It Pradesh and Punjab to launch field
forced selling of an insurance product could be a life cover or a level pilot programs to test some
to customers at periodic intervals. new measures. The government
personal accident cover with low pre- and IRDAI had commenced the ex-
This would be on the line of commis- miums that are pushed with a loan or ercise to address problems on the
sion/remuneration received by these account opening. crop insurance from early this year
banks and other corporate agents that and proposed the launch of a pilot
are disclosed usually on a quarterly Unless a customer wants the product, programme. It is analyzed that, if
basis. Often, banks and financial insti- they should not be made to buy it", he things move ahead as planned,
tutions that act as corporate agents said. This would mean those insurers these two States will be roped in to
force the customer to buy insurance without a bank partner or promoter introduce measurement of acreage
from a particular insurer. would still have to wait longer to get or/and yield on the basis of satellite
business from banc assurance. The images in place of physical measure-
It was suggested that the head of the regulator has said an insurer can have ment being used now.
banks (and other corporate agents) tie-ups with up to three insurers in any
line of business-life, non-life or health.
The Insurance Times, September 2015 9
Copyright@ The Insurance Times. 09883398055 / 09883380339
