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IRDA committee to examine insurance distribution networks

A committee has been constituted by IRDA to examine the functioning of the various distribution channels for life insurance products

Apnainsurance.com Research Bureau

27 Sep 2007

The Insurance Development and Regulatory Authority (IRDA) has formed a committee to study the functioning of the various distribution channels for life insurance products.

The committee will be chaired by Mr. N.M. Goverdhan, former Chairman, LIC of India. Managing directors and CEOs of leading life insurance players will be committee members.

The committee will look into several aspects of the distribution channels such as their functioning, their efficacy, cost-effectiveness and the weaknesses. It will also make recommendations to make these channels effective, professional and accountable. 

The committee will also review the system of licensing of the corporate agents, their qualifications, consider the suitability of permitting several corporate agencies within the same group, and examine the commission structure. The committee may recommend necessary changes based on the inferences drawn from its study. 

This IRDA committee will explore the need of a referral provider's network, scope for direct marketing, e-marketing and web-enabled sales points. It will also look into the scope of existing micro-insurance agency system and its remuneration. It may also suggest modifications and enlargement, if essential.