Insurance Products That Don’t Require an IRDAI License?
First, let me start by telling you why the IRDAI exists. The Insurance Regulatory and Development Act was introduced in 1999 for the purpose of regulating insurance business in India. This regulation governs the registration of insurance business in India, granting of IRDA Licence for starting an insurance business and protection of the interests of the policyholders. IRDA Licence provides a certificate for Insurance companies to operate.
Can Insurance products be sold without an IRDA License?
Insurance products can only be sold once by an insurance company that has a current and valid license from the IRDAI.
Although, insurance can be distributed without an IRDA License through Non employee-employer groups, these groups enable companies to distribute insurance policies without the prior requirement of acquiring an IRDA license.
What is a Non Employee-Employer Group?
A non-employee-employer group, also known as an informal group, refers to cohorts of customers associated with an organization, club, or association, etc.; not necessarily working for the same employer; for a purpose that is outside the specific needs of buying insurance.
Health Insurance distribution through Informal Groups
The insurance product, also known as a group insurance policy, is purchased by the group administrator. These group insurance policies are created by the insurance companies after studying the group, and its members and are then given to the group administrator. The insurance company analyzes the group and its members and gives a particular amount of cover based on the risk associated. Group administrators can pin this policy as an offer to their group members, allowing them to understand and enroll into this group policy.
Motor and Asset Insurance distribution through Group Administrators
The distribution in motor and asset insurance doesn’t require an informal group. The insurance product is defined and created by insurance companies and is then distributed through group administrators. These administrators can be banks, credit card companies, e-commerce retailers, etc. any company which has a unique association with its end consumers for a specific product or service.
Precautions while distributing Insurance without IRDA License
There are a few things that should be avoided when a company is distributing insurance without an IRDA licence. The company should avoid certain words such as sell, solicit, purchase, etc. because these definitions are linked with certifications and licenses intermediaries. In an informal group, a company never sells a policy rather it allows its customers to enroll in a program.
Role of Riskcovry in enabling Insurance distribution
Riskcovry enables insurance distribution for its partners by creating a product, pricing it and providing the technology(platform) required to distribute insurance. The partners can leverage their existing customer base to upsell or cross sell insurance, providing their customers a choice to opt into the insurance program.