INSURANCE
IRDAI directs bankers to focus on core job, not pedal insurance alone
Nov-21-2024

Insurance Regulatory and Development Authority of India’s (IRDAI) Chairman -- Debasis Panda has urged bankers to focus on their core job and not pedal insurance alone. He said bancassurance channel is very useful in deepening the reach of insurance in the country. He added 'there is merit in the system but we have to do it with care and caution so that you don't forget your activity and only start selling insurance. It should be incidental'. 

Insurance companies definitely need low-cost distribution solutions like the ones offered by the banks, which have a massive spread across the country and cover nearly all the inhabited places. While acknowledging the benefits of bancassurance in expanding insurance penetration, Panda highlighted concerns about mis-selling and emphasized the need for ethical practices. He stressed the importance of restoring confidence in the system through collaborative efforts between banks and insurers.

Most of the major banks have promoted insurance companies, and earn fat commissions from selling insurance covers which makes it a lucrative business. Meanwhile, Panda reiterated a Viksit Bharat is one where everyone is fully covered and all the stakeholders need to be working towards the same. The Irdai has put in place a forward looking regulatory system with operational flexibilities to all the players with that focus in mind, Panda said, adding that the regulator's job is varied.

Irdai needs to maintain financial stability, protect the policyholders' funds at all points of time and make sure that the insurers deliver on promises. It is also moving towards an enhanced risk management framework under which the industry will shift away from the factor-based risk management framework which looks at only liabilities, to one where both liabilities and capital buffers are taken into consideration to ensure that an entity remains solvent at any point of time.

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