IRDA chief pitches for a Jan-Dhan for insurance

MUMBAI: The insurance regulator is pushing for a slew of changes to push growth in the sluggish insurance industry into a new trajectory. The proposals include: a Jan-Dhan Yojana-like campaign for insurers, sharing uninsured vehicle data with the police to ensure compliance, relaxing caps on commissions for agents and having central ‘know your customer’ registries that will make selling insurance easier.
“The Jan-Dhan Yojana has been a very successful campaign in raising awareness of banking. We should have a Jan Bima Yojana to raise awareness of insurance,” said IRDA chairman T S Vijayan. The regulator implored the industry to use technology to increase penetration of insurance.
“I don’t think technology adoption has gone to the level of other institutions. If companies want to capture insurance, they should be able to give small-ticket insurance which can be afforded by 90% of the population,” said Vijayan.
Speaking at an insurance summit organized by FICCI, Vijayan said insurance companies should ensure that it is remunerative to be an insurance agent. He said an intermediary should be in a position to earn at least Rs 10,000 a month from selling insurance. The regulator has proposed removing the preset regulatory cap on first-year commissions on life insurance policies.
“Removal of the cap will give insurance companies the freedom to set commission. Our thoughts are, that what affects the customer is the overall charges that are deducted from the premium. We feel that there should be a cap on overall charges that a policyholder is subject to and if a company wants to pay higher commission from its shareholders account, it should be free to do so,” said Vijayan
Vijayan said the Insurance Information Bureau has got real-time data of every car insured with every any insurance company.