The Insurance Regulatory and Development Authority (IRDA), the regulatory body of the insurance industry in India, recently issued a circular expanding the types of entities eligible to serve as microinsurance agents and clarifying existing regulations that bar multiple microinsurance agents from employing the same individuals.
Loosening eligibility requirements for microinsurance agents to include a broader range of entities was originally proposed by IRDA in mid-2012 in an effort to increase the usage of insurance. In addition to NGOs, self-help groups (SHGs) and microfinance institutions (MFIs) eligible under the IRDA (Micro Insurance) Regulations of 2005, district cooperative banks; regional rural and urban co-operative banks; primary agricultural cooperative societies; companies appointed as banking correspondents by national banks; and individual owners of many types of retailers, including gasoline stations, telephone kiosks and subsidized and unsubsidized food shops, are also eligible for appointment as microinsurance agents.
IRDA also clarified that individual agents of traditional insurance companies and employees of licensed corporate agents and insurance brokers cannot also be engaged as microinsurance agents. A person that resigns from the employ of a microinsurance agency must wait three months to be eligible for an appointment with a different microinsurance or other corporate agent.
By Nicole Boyd, Research Associate
About the Insurance Regulatory and Development Authority (IRDA)
The Insurance Regulatory and Development Authority (IRDA) is the regulator of the insurance industry in India. Formed by the Indian parliament in 1999, the mission of IRDA is “to protect the interests of the policyholders” and “to regulate, promote and ensure orderly growth of the insurance industry.” According to 2011 IRDA data, the Indian insurance industry consists of 24 life insurers, 27 non-life insurers and one insurer. Data on the number of microinsurers in the country is unavailable. IRDA is overseen by the Reserve Bank of India, the country’s central bank.
Sources and Additional Resources:
Insurance Regulatory and Development Authority. “Micro Insurance Agents: Circular No. IRDA/LIFE/CIR/MIN/065/04/2013, Dated 3-4-2013,” http://www.taxmann.com/topstories/104010000000040088/irda-expands-the-definition-of-micro-insurance-agents-permits-to-include-co-operative-banks-and-societies.aspx
MicroCapital. January 11, 2013, “MICROCAPITAL BRIEF: India’s Insurance Regulatory and Development Authority (IRDA) Relaxes Paperwork Requirements for Microinsurance Customers,” https://www.microcapital.org/microcapital-brief-indias-insurance-regulatory-and-development-authority-irda-relaxes-paperwork-requirements-for-microinsurance-customers/
MicroCapital. October 5, 2012, “MICROCAPITAL BRIEF: India’s Insurance Regulatory and Development Authority May Require Insurers to Sign Up All Poor Families Within 5 Years,” https://www.microcapital.org/microcapital-brief-indias-insurance-regulatory-and-development-authority-may-require-insurers-to-sign-up-all-poor-families-within-5-years/
MicroCapital. August 6, 2012, “MICROCAPITAL BRIEF: Insurance Regulatory and Development Authority (IRDA) of India Proposes Shop Owners be Allowed to Sell Microinsurance,” https://www.microcapital.org/microcapital-brief-insurance-regulatory-and-development-authority-irda-of-india-proposes-shop-owners-be-allowed-to-sell-microinsurance/
MicroCapital Universe Profile: The Insurance Regulatory and Development Authority (IRDA) https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=IRDA
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