Reforms suggested in registration rules for insurance marketing firms to boost sector

Regulator Irdai Monday proposed to relax norms for registration of insurance marketing firms with an aim to improve the penetration of insurance products in the country.

Insurance marketing firms (IMFs) are registered by the Insurance Regulatory and Development Authority of India (Irdai) to solicit or procure insurance products.

Earlier this year, the regulator had constituted a committee for review of IMF regulations.

Based on the recommendations of the panel, Irdai has proposed several changes in the existing framework governing IMFs.

As part of the proposed changes, Irdai is considering to reduce the net worth requirement to Rs 5 lakh for applicants opting for an aspirational district. The NITI Aayog has designated 117 districts in 28 states as aspirational districts.

The current capital requirement for registration as an insurance marketing firm is minimum Rs 10 lakh.

Irdai has also proposed an expansion of the basket of products which can be solicited or procured by an IMF to include group insurance products for Micro Small and Medium Enterprises (MSMEs), crop insurance for non-loanee farmers and combi products.

Simplification of the process of resignation of insurance salesperson and expansion of the scope of work of Principal Officer are some of the other key changes proposed in the current regulations.

Irdai has sought comments from stakeholders on the proposed changes by December 15.

(With inputs from agencies.)