The Insurance Regulatory and Development Authority (Irda) is likely to make it mandatory for banks to sell insurance only through the broking model and thereby make the existing ‘bank as agent’ model redundant. In a meeting with the Insurers on Thursday, the Irda chairman TS Vijayan, expressed his displeasure on the banks continuing to sell insurance products of one particular insurer and not adopting the broking model where they can sell products of multiple insurers through which the customers can be served better. A source, who was part of the meeting, told The Indian Express that, “He said that if he did not see traction by April then he would not be averse to make the broking model compulsory for banks.” Several public sector banks have shown their reluctance in adopting this model because of the existing RBI guidelines and also because they have entered into an exclusive tie-up with one insurance company. This matter is expected to be taken up in a meeting of bankers with finance ministry officials later this month.
