Customers will now find it much easier to buy motor insurance policies or renew their existing ones on the go as the Insurance Regulatory Authority of India (Irdai) has allowed more touch points and prevented insurers from discriminating between dealers.
Irdai also said it might consider relaxing agency norms to ease distribution of simple policies including motor third-party policies through agencies such as pollution-check centres. It is, however, not clear if there will be any mandatory training requirement.
According to senior insurance executives, basic training in the products and how the premium is calculated, among others, should be provided to these new players.
The Insurance Laws (Amendment) Act passed in 2015 says nobody can be refused a motor insurance policy.
According to the Motor Vehicles Act, all vehicles running on Indian roads should have a third-party motor insurance policy, which covers owners from third-party liabilities arising from accidents.
Irdai is also encouraging insurers to bring out over-the-counter products that can be sold easily through shops, and medical stores, among others.
Earlier this year, the regulator had said all agents should have an equal opportunity to source motor business.
Under existing rules, policyholders have a right to choose any agent, intermediary or insurer to avail of insurance services.
Irdai recently said that some general insurance companies having tie-ups with a particular motor dealer were not accepting motor business, if it was sourced by any other agent or intermediary.
The regulator clarified there shall be no restriction whatsoever on sourcing or servicing motor insurance business (including personal accident policies) by any agent, intermediary or insurer on the grounds that they have a tie-up with a motor dealer or manufacturer.
Further, it has to ensured that no clause/agreement/tie-up in variation with the above directions shall be entered into by any insurer with any motor dealers/ manufacturers etc. It should also be ensured that all existing agreements confirm with the above direction.
Curated from Motor insurance to have more touch-points