Life Insurance Corporation of India
Content
Life Insurance Corporation of India (LIC) intends to enter into separate tieups with National Insurance Company (NIC), Oriental Insurance, United India Insurance and New India Assurance for selling composite micro-insurance policies to rural masses reports Economic Times. The Insurance Regulatory and Development Authority (Irda) had recently allowed life insurers to tie up with general insurance companies for developing micro-insurance products which can have both life and non-life components in a single policy. An official at LIC told ET, “We have formed a special team which is looking into various aspects of the composite
micro-insurance business. This team is in the process of formulating a business plan for LIC. Once a business plan is ready, we will approach Irda for a formal permission.” “Separate alliances with general insurers also need to be forged and we are in touch with all of them,” the official added. He, however, said, “Irda’s recent notification on composite microinsurance policies requires certain clarifications. For instance, it does not mention whether one life insurance company can tie up with more than one general insurer or vice versa.” “If allowed to go for more than one tieup, we would like to forge alliances with all four public sector general cinsurers,”
said the LIC official. “We intend to approach Irda for a clarification on the issue once our business plan for the segment is ready,” he added. “Micro-insurance polices for the life segment already exists in LIC’s product portfolio. The corporation is now looking at the possibility of adding nonlife components to these policies. LIC is also looking at the possibility of launching new composite life insurance policies specifically aimed at rural India,” said LIC sources. V Ramasaamy, CMD, NIC, said, “NIC is in the process of formulating its own business plan for the segment.” As per Irda rules, all composite microinsurance policies will have to be sold
through micro-insurance agents. All these agents will have to undergo proper training from companies selling such products. Nevertheless, commissions on policies sold have been capped at 10% of premium for single-premium policies, and 20% for non-single premium policies. For non-life policies, commissions will have a 15% cap. According to the regulator, general covers on dwelling and contents, livestock, tools, crop cannot exceed Rs 30,000 per asset-covered, the minimum being Rs 5,000. Insurers will be allowed to provide a maximum cover of Rs 50,000 for personal accident policies, while the
minimum has been fixed at Rs 10,000. Irda has also stipulated that insurers can provide a maximum of Rs 50,000 as sum assured for a maximum of 15 years. For endowment policies and health insurance covers provided by life companies, the upper limit for sumassured is Rs 30,000, while the minimum has been fixed at Rs 5,000. Accident benefit under life policies, according to Irda, may range between Rs 10,000 and Rs 50,000, while the term can vary between 5- 15 years. The ban on life insurance companies tying up with general insurers for selling composite policies in urban India, however, is still on.
micro-insurance business. This team is in the process of formulating a business plan for LIC. Once a business plan is ready, we will approach Irda for a formal permission.” “Separate alliances with general insurers also need to be forged and we are in touch with all of them,” the official added. He, however, said, “Irda’s recent notification on composite microinsurance policies requires certain clarifications. For instance, it does not mention whether one life insurance company can tie up with more than one general insurer or vice versa.” “If allowed to go for more than one tieup, we would like to forge alliances with all four public sector general cinsurers,”
said the LIC official. “We intend to approach Irda for a clarification on the issue once our business plan for the segment is ready,” he added. “Micro-insurance polices for the life segment already exists in LIC’s product portfolio. The corporation is now looking at the possibility of adding nonlife components to these policies. LIC is also looking at the possibility of launching new composite life insurance policies specifically aimed at rural India,” said LIC sources. V Ramasaamy, CMD, NIC, said, “NIC is in the process of formulating its own business plan for the segment.” As per Irda rules, all composite microinsurance policies will have to be sold
through micro-insurance agents. All these agents will have to undergo proper training from companies selling such products. Nevertheless, commissions on policies sold have been capped at 10% of premium for single-premium policies, and 20% for non-single premium policies. For non-life policies, commissions will have a 15% cap. According to the regulator, general covers on dwelling and contents, livestock, tools, crop cannot exceed Rs 30,000 per asset-covered, the minimum being Rs 5,000. Insurers will be allowed to provide a maximum cover of Rs 50,000 for personal accident policies, while the
minimum has been fixed at Rs 10,000. Irda has also stipulated that insurers can provide a maximum of Rs 50,000 as sum assured for a maximum of 15 years. For endowment policies and health insurance covers provided by life companies, the upper limit for sumassured is Rs 30,000, while the minimum has been fixed at Rs 5,000. Accident benefit under life policies, according to Irda, may range between Rs 10,000 and Rs 50,000, while the term can vary between 5- 15 years. The ban on life insurance companies tying up with general insurers for selling composite policies in urban India, however, is still on.
