Public Sector Banks Open upto Multiple Insurers

From April 1, open architecture for bancassurance came into existence. In less than two months, a handful of public sector banks (PSBs) Andhra Bank, Bank of India (BoI), Bank of Maharashtra (BoM), Bank of Baroda (BoB) and Canara Bank have come forward to tie up with multiple insurers. All these banks had brought out a request for proposal (RFP) to tie up with more than one insurance company. For instance, BoM in its RFP has said it is exploring the possibility of entering into tie-ups with two more general insurance companies as their corporate agents. It already has a partnership with United India Insurance to sell their products. Similarly, it is exploring the possibility of tie-ups with standalone health insurance companies, since it has no such partnerships at present.

The Insurance Regulatory and Development Authority of India (Irdai) has opened up the corporate agency channel, which includes banks. It has opened a channel wherein banks (and other corporate agents) can engage with up to three life, three non-life and three standalone health insurers (earlier, it was only one in each of the three segments). Hence, a bank can sign up with a maximum of nine insurers to sell its products.While some banks have expressed interest in tying up with multiple insurers in each category, some want to keep it restricted. Canara Bank, for instance, intends to enter into a corporate agency agreement with one more general insurance company (it already has a tie-up with United India), to tap into the vast potential available for general insurance business at all its branches across the country and help customers cover their assets against various kinds of risks. Canara is one of the promoters of Canara HSBC OBC Life Insurance, a 100% bancassurance-led insurer.