Allow banks to sell policies of 5 cos, say life insurers

NEW DELHI: Life Insurance Council (LIC), an industry association, has favoured selling of products of five insurance companies through a bank.
LIC has recommended that a bank can tie-up with at least five insurers with not more than 25% share per insurer. The association will be presenting note to IRDA for its consideration soon, sources said, adding, it is up to the insurance regulator IRDA to accept or reject proposal.
IRDA is yet to come out with the final guidelines on the bancassurance.
Some of the insurance companies like Tata AIA, Aviva, DLF, Bajaj and Reliance Life have supported the recommendation, sources said.
Even finance minister P Chidambaram had also favoured the idea of bank acting as broker for selling products for penetration of insurance in the country. "At present, the policy on Bancassurance is 'one bank one insurance company (one life and one non-life )'. In this arrangement, the bank acts as the agent of the insurance company," the finance minister had said.