Insurance brokers have requested the Insurance Regulatory and Development Authority of India (Irdai) to allow them to appoint ‘Bima Vahaks’ and not limit the appointments to insurance companies, as this will aid in insurance penetration.
The proposal was put forth during the ‘Bima Vitarak Manthan’ held earlier this month. The meeting was attended by various insurance intermediaries including insurance brokers, corporate agents, and other Insurance Marketing Firms (IMFs).
The event was organised to have a discussion, share insights, and explore innovative strategies and collaboration in the insurance sector.
“During the Bima Vitarak Manthan, one of the proposals put forward by the Insurance Brokers Association of India (IBAI) was to allow insurance brokers and corporate agents to appoint Bima Vahaks instead of limiting their appointment to insurance companies only,” R Balasundaram, secretary general, IBAI, told Business Standard.
“It was suggested that corporate agents, insurance brokers, and other distribution channels appointing women as Bima Vahaks at the Gram Panchayat level should lead to faster creation, training, and service support, as brokers or corporate agents have the experience, expertise, and infrastructure to support them,” Balasundaram said.
Bima Vahak, a part of Irdai’s Bima Trinity, is a women-centric, dedicated distribution channel to sell insurance products.
Bima Vahak would be a legal person registered in accordance with the respective laws and engaged by an insurer. Insurance companies have the authority to appoint individual Bima Vahaks or engage with corporate Bima Vahaks to progressively achieve coverage of every Gram Panchayat.
The Bima Vahaks, both corporate and individual, will be authorised to undertake activities like the collection of proposal information and know-your-customer (KYC) documents and coordinate claims-related services.
According to brokers, insurance companies will have to invest in Bima Vahaks, which will be a fixed cost for insurers, whereas it will be a variable cost for the distribution channels. The expertise offered by the distribution channel will also aid in insurance penetration in the country.
While discussing other methods to boost penetration, insurance brokers have also asked for additional distribution channels.
Vedanarayanan Seshadri, managing director and chief executive officer, Mahindra Insurance Brokers, said, “Insurance brokers have also represented that auto dealers under the Motor Insurance Service Provider (MISP) arrangement be allowed to distribute other products, leveraging their extensive reach across the country and their large customer base to fast track penetration of insurance products.”
In 2017, Irdai framed Guidelines on Motor Insurance Service Provider, 2017 (MISP Guidelines), following the report of a committee set up to review payouts to automobile dealers. The guidelines regulated the distribution of motor insurance business by automobile dealers. Now, the insurance brokers have suggested the sale of other basic insurance products through these auto dealers.
Furthermore, IBAI has also suggested some other recommendations which will enhance the role of insurance brokers and improve the overall customer experience, like reducing the educational qualifications of insurance agents from 10th pass to 8th pass.
They have also suggested participation of insurance brokers in State Level Insurance Committees (SLIC) and steering state-level insurance programmes for last-mile penetration, extending coverage to villages through Gram Panchayats and district-level insurance committees.
First Published: May 26 2024 | 4:44 PM IST