The Insurance Regulatory and Development Authority of India (IRDAI) is likely to look at opening up distribution architecture further and may allow individual agents to tie-up with insurers, sources informed CNBC-TV18.com.
"Agents may tie up with 3 insurers each in life, general and standalone health insurance. IRDAI may release draft consultation on opening up of agency network. This would require change in act and parliamentary nod," sources said.
Currently individual agents are only allowed to tie-up with 1 insurer each.
IRDAI had earlier released draft paper allowing banks to tie up with 9 insurers.
On Tuesday, IRDAI Chairman's Debasish Panda also said that issuance of a composite license will need a change in law, for which discussions are already underway with the government and a decision will be taken at an appropriate time. Though he termed composite licensing not really an obstacle as far as insurance penetration is concerned, he pointed out that in many jurisdictions there is already a method of issuing one license for many kinds of insurance.
Recently, the insurance regulator also proposed a 20 percent cap on the agents’ commission for insurance companies. It released a draft consultation paper on the commission limit.
The limit on agents’ commission, remuneration and reward has been proposed for general insurers and standalone health insurers.
Last month, the insurance regulator had also released a consultation paper on the expenses of management limit. It had also proposed setting up a new platform for sale, servicing and claims of insurance policies
IRDAI had said that insurance platform would help insurance penetration in Tier 2, 3 areas and would also bring down existing commission rates.