With the idea of progressing insurance saturation in the country, the Insurance Regulatory and Development Authority of India (IRDAI) has granted distribution of all micro-insurance products through point of sales (POS).
To encourage insurance coverage among the economically vulnerable sections of the society, IRDAI has crafted a unique category of insurance policies called ‘Micro-Insurance’ policies. It consists of a life or general insurance policy with a sum of ₹50,000 or less assured.
IRDAI declared that there was a need to identify the person involved in the sales process. The insurers altered the rules regarding the mandatory rule for every policy sold through the ‘Point of Sales Persons’ to separately identify and pre-fixed by the title ‘POS’. IRDAI Protection of Policyholder’s interest Regulations, 2017 makes it obligatory to provide the details of the person involved in the sales process.
The circular by IRDAI stated that “By virtue of this requirement, the need to have the prefix ‘PoS’ becomes redundant as the insurance policy itself will carry the details of the person selling such a policy. The authority hereby discontinues requirements of using the word ‘PoS’ prefixed before the PoS product name for life, general and health products”.
IRDAI has granted distribution of micro-insurance products through POS, because it observed that the advantages of lower prices, higher insurance penetration, and increased choice to customers would be lost due to non-availability of sales through this channel.
While dealing with cases like health/personal accident policies where the sum insured amount crosses the limit mentioned in the Point of Sales guidelines, IRDAI has left it to the sponsoring entity to recognize such policies as being sourced by the POS and directed them to pay fees to the POS.
*Source:The Hindu Business Line
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