Irdai urges bankers to focus on core business, not sell insurance alone; avoid bad selling
Insurance industry regulator Irdai Chairman Debasis Panda on Tuesday urged banks to focus on their core business and not pedal insurance alone.
In remarks that came a day after Finance Minister Nirmala Sitharaman also made similar proposals, Panda said the bancassurance channel is very useful in deepening the reach of insurance in the country.
“There is a good job in the system but we have to do it carefully and carefully so that you don’t forget your job and start selling insurance. It has to happen by mistake,” said Panda, speaking at the annual meeting of banks and economy organized. with SBI here.
Insurance companies really need low-cost distribution solutions like those offered by banks, which are spread across the country and cover almost every residential area, he said.
“The banca channel is a very useful channel. But lately, a lot of bad things have entered the program. We all need to stay together, express that, bring back that confidence,” said Panda, adding that there is a “mis-selling” as well.
Sitharaman asked the bankers to focus on their core activities and avoid mis-selling of insurances, pointing out that many times this indirectly leads to an increase in the cost of lending to the bank’s customer.
It can be noted that most of the big banks have promoted insurance companies, and they earn fat commissions by selling insurance covers which makes it a very profitable business.
Meanwhile, Panda reiterated that Viksit Bharat is where everyone is fully integrated and all stakeholders need to work towards the same.
Irdai has installed a forward-looking control system with operational flexibility for all players with that in mind, Panda said, adding that the role of the controller is different.
Irdai needs to maintain financial stability, protect policyholders’ funds at all times and ensure that insurers fulfill promises, he said.
It is also moving towards an improved risk management framework where the industry will move from a risk management framework that only looks at liabilities, to one that considers both liabilities and capital protection to ensure that the company remains solvent. at any time, he said.
