• Investment World
• eWorld
• Catalyst
• Mentor
• Life
• Canvas
• Praxis
• Urban Pulse
• Brand Quest

Our Bureau

Mr N. Rangachary, IRDA Chairman, flanked by Mr R.H. Sarma (left), CEO, Indian Institute of Bankers, and Mr B. Vasantham, Andhra Bank CMD, at a national seminar on bancassurance in Chennai on Thursday.

CHENNAI, April 18

THE Insurance Regulatory and Development Authority (IRDA) is considering bringing in a `policyholders' protection regulation', which could include a mandatory `free look' period for all policies and interest to the insured, in case of delayed settlement of claims.

This was mentioned by Mr Harbhajan Singh, who was a member of the IRDA till last month, at a seminar on bancassurance, organised here by the Indian Institute of Bankers and SBI Life.

He, however, said that the `policyholders' protection fund' may not materialise. Mr Singh pointed out in his speech that there were cultural differences between bankers and insurance companies. Banking business is basically laid back, whereas, insurance products are sold aggressively.

"My experience as a Chairman of a bank is that the bank staff are not willing to sell their own bank's credit cards, leave alone insurance products," he said. Mr Singh was earlier the Chairman and Managing Director of the Punjab & Sind Bank.

Earlier, speakers at the seminar pointed out that bancassurance model was fraught with difficulties and the model would not be a success unless there was commitment from both the sides.

It was pointed out that if the banks looked at it as another means of increasing their `other income', it would not work. Banks would need to look at selling insurance products as `filling a gap' in their offerings of financial services.

Some bankers appealed to the IRDA that banks should be allowed to function as corporate agents for more than one insurance company.

The IRDA Chairman, Mr N. Rangachary, said that there was basically three issues in bancassurance - that of how to remunerate the bank counter staff who actually deal with the customers, whether or not all the counter staff should pass the mandatory examination for selling insurance, whether or not banks could `own' insurance companies.

He said that the IRDA would evolve regulations, depending upon the opinion that would be gathered.

On the sidelines of the seminar, Mr Rangachary said that the insurance companies had by and large performed well during 2001-02. He said that Bajaj Alliance (non life) had earned a premium income of Rs 120 crore, Reliance (non life) Rs 82 crore and Royal Sundaram Alliance Rs 73 crore. He said all the life insurance companies had achieved their rural obligations.

Send this article to Friends by E-Mail

Stories in this Section
Madras HC restrains CBDT on treatment of NBFC income

Copyright © 2002, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line