Insurance Regulatory and Development Authority has decided to allow tie-ups between life and non-life insurers to provide composite products to poor people.
This is part of a fresh set of regulations for micro insurance that have been finalised and would be notified in two to three months, T K Banerjee, Irda member, said on Wednesday.
Irda had earlier barred joint selling of life and non-life insurance products, but has now decided to permit partnerships for providing affordable insurance cover for the poor.
The new regulations are aimed at providing an infrastructure over which micro insurance can be developed in a proper manner to make available insurance to the poor at affordable premium.
Irda has also decided to have a shorter training period for micro insurance agents, who would not be entitled to sell other insurance products.
The minimum number of hours of training required for micro insurance agents will be reduced to 25 hours against 100 hours for normal insurance agents, Banerjee said.
The insurance regulator also threatened to insist on a quota on rural branches.
"The new insurance companies are busy tapping the potential in urban and metro areas and very few branches have been opened to cater to the needs of rural population. If the matter continues in the same manner, Irda has to rethink and introduce a system for opening of branches in rural areas," he said.
He said insurance companies are asking for more time to consolidate their operations before they could start opening large number of branches in rural areas. Banerjee said of the seven states in the north-east, insurance companies have opened branches only in Assam.
Irda also plans to come out with guidelines on unit-linked insurance plans stipulating a life cover of three to five times the annual premium. This will result in most ULIP products of life insurers getting debarred.
"Life insurers will have to either phase out or stop selling their ULIPs which do not meet the new guidelines," Banerjee, said on the sidelines of a seminar on information technology in insurance.
The insurance sector has grown rapidly after opening up the sector to the private players. The per capita insurance premium has gone up to Rs 750 from Rs 300 since 2000.
Banerjee said one of the priorities for fostering expansion of domestic insurance would be identification of productive potential and specific insurance needs in areas not yet reached by insurance and enhancing cooperation between rural credit schemes and institutions.
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