New Delhi: Post offices can now distribute insurance products with Irda, allowing each circle of the department of post (DoP) to act as a corporate agent of insurers.
“Each Circle of India post should be treated a separate unit in order to grant independent corporate agent licence with various insurers,” insurance regulator Irda said while granting permission to postal circles to distribute insurance products.
It, however, said in the case of metropolitan areas, head of Circle may approach Irda for prior approval of further division in the circle as separate units to obtain licence to act as corporate agent in view of the large population.
The DoP has divided the whole country into 22 postal circles for providing postal services.
The Insurance Regulatory and Development Authority (Irda) allowed each circle to tie up with two non-life insurance companies, two life insurance companies, one agricultural insurance company and one standalone health insurance company for this purpose.
Corporate agents act as insurance agent for insurers and procure business on behalf of the insurance companies through its executives.
The sector watchdog had last month sought views from insurers for granting corporate agency licence to the DoP to promote financial inclusion.
An expert committee on ‘Harnessing the India Post Network for Financial Inclusion had earlier recommended that the low cost platform of India Post be used for strategic partners like microfinance institutions (MFIs), mutual funds and insurance companies.
It also suggested expanding the role of Post Office Savings Bank as an agent of Ministry of Finance to play a larger and direct role in financial inclusion.
However, Irda has disallowed the head office of India Post to engage in the distribution of the insurance products.
“In its individual capacity the Head/Corporate Office of India Post shall not obtain license to act as Corporate Agent of any insurance company. The Head /Corporate Office of India Posts shall not engage in the distribution of insurance products of any insurance company registered with IRDA in any other capacity,” it added.