Simplify product distribution, IRDAI chief tells insurers

The regulator has asked insurers to simplify the way insurance products are distributed.

“Insurers can bring in simplified distribution within the existing framework itself,” said TS Vijayan, Chairman, Insurance Regulatory and Development Authority of India (IRDAI), on the sidelines of the Institute of Actuaries of India summit.

Through regulations, such as management of expenses and commissions, IRDAI is trying to encourage companies to roll out simplified distribution structures.

He added that for simple products insurers can look at distributors, such as point of sales persons, while agents can be trained more comprehensively for selling more complex products.

Expense management When asked whether IRDAI is having a re-look at the expenses management circular, Vijayan said shareholders must take cognisance of the expenses incurred by insurers. The IRDAI chief said unlike earlier where insurers had to pay penalties for exceeding their expense limits, the current proposed provisions, such as restriction on opening new branches, are likely to have a bigger impact.

Vijayan also said catastrophe insurance premiums could go up after the massive losses insurers faced in the Chennai floods recently.

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