Wednesday, April 30, 2014

SBI General Opposes Multiple Insurance Broking Model

Leading private sector general insurer, SBI General Insurance Company has opposed the idea of making it mandatory for banks to act as insurance aggregators, saying this move would not help curbing mis-selling of insurance products.

SBI General has written to the Insurance Regulatory and Development Authority (IRDA), stating that it disagrees with the proposal, said Mr. Mike Wilkins, MD & CEO of Insurance Australia Group (IAG), the foreign partner of the company.

However, the company said that it would take a fresh look at its marketing strategy if the regulator implements the insurance broking model.

SBI General Insurance Company Limited is a joint venture between the State Bank of India and Insurance Australia Group (IAG). SBI holds 74% stake and IAG the remaining 26% stake in the joint venture.

The finance ministry and the IRDA have clearly said that banks will soon have to adopt the broking model, which allows banks to sell products of all insurance companies and disallows the current practice of acting as 'corporate agents', wherein they sell products of a single company with whom they have an exclusive tie-up.

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