IRDAI goes to grassroots, mandates life and health cover down to Gram Panchayats
In a move to take insurance down to the grassroots, the Insurance Regulatory and Development Authority of India (IRDAI) has mandated life and general insurers to extend cover to certain identified Gram Panchayats.
Per the master circular issued by the regulator on rural, social and motor third party obligations, the Life Insurance Council, in consultation with the Ministry of Panchayat Raj, will indicate the minimum number of Gram Panchayats each life insurer will cover on mutually agreed parameters such as market share.
Once the number of Gram Panchayats to be covered by each insurer is determined, the insurers can identify them in a State(s) of their choice for fulfilment of obligations, the IRDAI said.
A similar exercise will also be taken up by the General Insurance Council to identify the Gram Panchayats for extending health cover, Motor Third Party (MTP) insurance and cover for dwelling shops, per the new norms.
MECHANISM & IMPACT
The insurers will have to put in a mechanism to identify, record, coordinate and exchange information on the number of lives/persons/ vehicles covered by life and general insurers in each Gram Panchayat. “To achieve the goal of full saturation of the Gram Panchayat, the insurance companies should work in close
The Life Insurance Council, in consultation with the Ministry of Panchayat Raj, will indicate the minimum number of Gram Panchayats each life insurer must cover
coordination with the Gram Sarpanch and Gram Sachivalya,” the insurance regulator said.
The new norms will be applicable from the current financial year.
“By setting increased annual targets for lives to be insured in each Gram Panchayat and encouraging insurers to aim for 100 per cent life insurance penetration, the IRDAI has taken another massive step towards accelerating life insurance adoption,” Alok Rungta, MD & CEO, Future Generali India Life, told businessline.
As the insurance regulator directed, the insurers to establish dedicated operational procedures and provisioning for a quarterly review mechanism, all stakeholders involved can regularly monitor progress and collaborate eectively to spur insurance adoption at the grassroots.
The new norms will also augur well for the recentlyannounced IRDAI objective of ‘Insurance for All by 2047’.