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The Insurance distribution is likely to receive a boost as the Insurance Regulatory and Development Authority (IRDA) is set to allow distribution companies to have multiple tie-ups with insurers.
In an exposure draft on insurance marketing firm regulations released on Wednesday, the regulator said the proposed model would be similar to independent financial advisor based on the recommendations of the Govardhan Committee on Distribution.
The Insurance Marketing Firm would be licensed by the Authority to engage Insurance Sales Person (ISP) for the purpose of marketing all kinds of insurance products. It could also engage Financial Service Executive (FSE) in marketing of mutual fund products, pension products and financial products authorised for sale by investment advisers under the Securities Exchange Board of India (Investment Advisers) Regulations.
The capital requirements for insurance marketing firms have been spelt out. The Applicant should have a net worth of not less than Rs 10 lakh whether it is a company or a LLP or a partnership firm.
The net worth should be maintained at all times, the draft said.
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