Insurance agents may get to sell products of all cos

DO you remember the last time you wanted to buy a general insurance product — be it a mediclaim, a householder's policy or an accident cover ? In all probability, you had to painstakingly compare every product feature and eventually opt for a particular policy based on your needs. This was because an agent from a particular company would neither inform you on product features of another insurer's products nor sell its products as he isn't allowed to do so.
    If Insurance Regulatory & Development Authority (Irda) accepts the recommendations made by the N M Govardhan Committee on distribution channels, that could be history. To provide a holistic product range to consumers with comparison across products, the committee has proposed that retail insurance agents from general insurance companies be allowed to contract with multiple non-life companies and sell policies of more than one company. At present, an exclusivity clause in insurance regulation restricts an agent from working with more than one insurance company. "Retail insurance agents are a new concept to sell personal lines of products. The committee feels this will increase penetration of general insurance retail products," the committee recommended.
    "Penetration levels of general insurance products are very low, even lower than life insurance products. The recommendation will help increase sale of general insurance policies including mediclaim covers and offer a wide range of option to his/her clients," said an analyst.
    In a parallel development, the panel set up to look into senior citizens' health insurance aspects has suggested convergence of agents for health insurance plans. This means agents of any insurance company — private or public sector, life and general — can sell mediclaim and health plans of any other company. In effect, the agent will work as a broker for health covers. You as a customer will have a choice from a vast array of products both specialised and off the shelve.
    If both the recommendations are accepted by the regulator, agents from general insurance companies will be able to sell an array of health covers both from life and non-life companies as well as offer a wide range of other non-life retail policies including accident covers, motor vehicle insurance, and householders policy.
    Currently, there are 18 life insurance companies and another 18 general cover companies. Although not all 18 life companies have launched health covers, a handful of them have and a host of others are looking at launching the product. Following adoption of this norm, each of the 20 lakh life insurance agents and 10 lakh general insurance advisors will be able to sell health plans from 17 general insurance companies and 16 life cover companies. However, not all life insurers have started selling health insurance policies though all the non-life companies have more than one version of the product. The largest life insurer , Life Insurance Corporation of India, which has about 13 lakh agents has announced plans of selling health insurance plans.