In a bid to increase insurance penetration in the country, the Insurance Regulatory and Development Authority of India (IrdaI) is in the final stages of finalizing rules for Over the Counter (OTC) insurance products. IrdaI is expected to issue guidelines in this respect in few weeks.
Once done, insurance companies will be able to sell simple insurance products without lengthy forms or documentation.
At present, the product is first designed, priced and than sent to the IrdaI for approval. Once satisfied with broad contours, IrdaI approves it.
In the recent past, the IrdaI had said that commercial products in general insurance may be sold under use and file procedures, the term for an insurer being permitted to market a product without its prior noting.
This could soon be extended to life insurers. The segment has started to design products that are simple, so that these can be sold as OTC products. Complex products like Unit-Linked Insurance Plans (ULIPs) might not be allowed to be sold as OTC as they are difficult to understand. Pure term insurance or endowment insurance policies could be sold freely if the regulations permit.
It is expected that a number of smaller touchpoints will be activated like medical stores, grocery stores and petrol pumps from where OTC products can be purchased. This would not require any special training for the staff, except basic training in the concept of insurance.
No comments:
Post a Comment