In an exclusive conversation with CNBC-TV18, IRDAI Chairman Ajay Seth said the regulator is also widening the scope of Point of Sales Persons (POSPs), allowing them to sell a broader range of insurance products after completing online training and a test.
“Anybody who has got some enterprise somewhere, living somewhere, enable that person to be a service provider, an insurance seller in that geography itself,” Seth said.
From telecom outlets to village-level sellers
Under the proposed framework, telecom companies could use their outlets and agents to sell insurance. Seth also pointed to more than five lakh Common Service Centres, predominantly located in rural areas, as another potential distribution channel.
Banking correspondents could also sell insurance products under the proposed approach. Seth said the regulator wants to leverage existing local networks rather than rely on representatives travelling from larger cities to serve customers in other areas.
The aim is to create more opportunities for people to sell insurance within their own communities while expanding access in underserved areas.
Also read: IRDAI Chairman Ajay Seth defends insurance paper, says costs must fall
POSPs get wider product access
IRDAI currently allows POSPs to sell a limited set of relatively simple insurance products. Seth said the regulator is looking to broaden the framework so that POSPs who complete online courses and pass a test can sell a wider range of products, including unit-linked insurance plans (ULIPs).The approach, he said, is aimed at giving POSPs the skills and training needed to handle more products while expanding the pool of people who can distribute insurance.
The consultation paper also proposes allowing insurance distribution entities to sell non-insurance financial and non-financial products. Seth said a broader distribution network could help improve insurance access without relying solely on traditional intermediaries.
The proposed changes form part of IRDAI’s wider consultation on the economics of insurance distribution, which seeks to bring greater efficiency to insurers, distributors and the regulator while improving value for policyholders.