Soon, common service centres to begin selling life insurance

CSC e-Governance Services India Ltd, a special purpose vehicle floated by the Government to operate common service centres, will begin selling life insurance in about a month’s time.

“About 250 village-level entrepreneurs have completed the mandatory process and are ready to sell specially-designed insurance products through our centres,’’ Dinesh Kumar Tyagi, CEO of CSC e-Governance, told Business Line on Friday.

Over 2,000 people have so far registered for the examination to become agents. CSC aims to enlist over 10,000.

The organisation, which operates 130,000 common service centres to provide a host of services in rural areas across the country, has tied up with 14 insurers and is working on teaming up with the others.

“We have just completed the technology integration required to sell insurance as e-Know Your Customer (KYC) norms have to be adhered to. A few insurance companies have already designed specific products and are waiting for approval from the Insurance Regulatory and Development Authority (IRDA),” Tyagi said.

The approval is expected anytime and sale of products should commence in about a month, he added.

The centres have started collection of insurance premium amounting to ₹30 lakh to ₹40 lakh a day.

“One in four people do not pay premium due to the lack of access to payment centres. Our work will bridge the gap in this regard,” he said.

As of now the premiums of LIC, SBI Life and Aviva policyholders are being collected. Tie-ups with all insurers will be completed by this month-end, he added.

Insurance penetration in India stood at just 3.96 per cent in 2012. The inclusion of CSCs in insurance distribution, as part of the National e-Governance Plan, would help in expanding coverage, say experts. They can function as front-end delivery points for the government, private and social sectors to provide services to citizens.

The insurance regulator had framed the guidelines for CSCs earlier this year. Products will be prefixed with the word CSC to distinguish them as exclusive CSC products while filing for IRDA approval.

Under the rules, the maximum commission in the first year (at the time the product is sold) cannot be more than 5 per cent of the premium paid in the first year.

No commission will be payable from the second year onwards. Service charges will be fixed for every activity.