Tuesday, September 17, 2013

Insurers to use Common Service Centres as distribution networks

Concerned over the low insurance penetration especially in rural areas, the Insurance Regulatory and Development Authority (IRDA) has released new guidelines allowing insurance companies to use licenced Common Service Centres (CSCs) as distribution networks in rural areas. An initiative of the National e-Governance Plan, the CSC model will operate in rural areas without access to internet. The plan provides services like e-governance, education and utility payments and works on the public-private partnership model.
With the help of a Rural Authorised Person (RAP), these centres will help insurance companies to market certain categories of retail policies through a special-purpose vehicle. A RAP will act as an insurance agent. The RAPs will help prospective insurance buyers in choosing appropriate product based on their need, and obtain detailed information relating to proposers/persons/risks to be insured and protection needs and suggest on the adequate cover.
Moreover, the RAPs will also assist prospect buyers/policyholders in all manners, whether, it’s about premium payment, assignment of nominee, claim procedure, filing forms or collecting of documents like death certificate or any other document required for the speedy settlement of the claims.
The regulator hopes this scheme will help insurance reaching out to the most untapped areas of the country. Through this scheme, people in remote will come to know about various insurance products and their benefits and hence insurance penetration in the areas can be increased. For the rural areas, the regulator has directed all insurance companies to design special products to be marketed exclusively through the CSC model and file the products for approval with the regulator. These products will be tailored especially according to needs of a particular area or the insured. Under the products, the maximum Sum Assured per life or risk will not be more than Rs two lac, except for motor insurance.
The RAPs will have to undergo 20 hours of mandatory training and register on the Learning Management System website. The online examination of RAPs will be conducted by the National Institute of Electronics and Information Technology, which is an autonomous scientific society of the Government of India, Department of Electronics and Information Technology.
The RAPs will have to provide necessary assistance to the policyholders, claimants or beneficiaries in complying with the requirements for settlement of claims by the insurer and forward any information received from the client regarding a claim or an incident that may give to a claim without any delay. Also, if there is any delay on the part of the insurer to settle the claim, the RAPs will have to inform the policyholder accordingly, said the guidelines, adding, to increase persistency, the RAP will have to ensure remittances of premiums by policyholders within the specified time by giving them notice well before time, both orally and in writing.

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