In a recent circular, IRDAI has allowed distribution of all micro-insurance products through point-of-sales (PoS), with an aim further increase insurance penetration in the country. The Insurance Regulatory and Development Authority of India (IRDAI) has created a special category of insurance policies called micro-insurance policies to promote insurance coverage among economically vulnerable sections of society.
New initiatives taken by IRDAI to increase insurance penetration especially in rural India. Health insurance in India has huge potential for expansion but it continues to grapple with low penetration rate of in rural areas. Nearly 68% of India's population resides in rural areas whereas only 14.1% are covered under health insurance schemes.
Following are the major points:
· All Micro lnsurance products of Life General and Health to be distributed through the POS - Allowing all Micro Insurance products of Life, General and Health insurance to be distributed through the POS, thereby ensuring reduction in unnecessary costs which would otherwise be accrued to the policyholder
· Manner of dealing with cases of Health/ PA policies allowing insurance where Sum lnsured crosses the limit specified under the POS guidelines - If the maximum sum insured under the policy crosses the limit on account of no claim bonus accruing to the policyholder, the sponsoring entity is allowed to recognize such policies as being sourced by the POS and pay the fees to the POS.
The regulator has taken these steps to encourage higher insurance penetration, lower prices and increased choice to customers.