IRDAI call:
In a move aimed at democratizing insurance access, the Insurance Regulatory and Development Authority of India (IRDAI) has mandated life and general insurers to extend coverage to specific Gram Panchayats. According to the master circular issued by the regulator on rural, social, and motor third-party obligations, the Life Insurance Council, in consultation with the Ministry of Panchayat Raj, will determine the minimum number of Gram Panchayats for each life insurer based on agreed parameters like market share. Once the number of Gram Panchayats for coverage by each insurer is finalized, insurers can select them in a state(s) of their choice to fulfill their obligations, as per IRDAI.
Similarly, the General Insurance Council will identify Gram Panchayats for extending health cover, Motor Third Party (MTP) insurance, and coverage for dwelling shops, under the new norms.
Mechanism-wise, insurers are required to establish a system to identify, record, coordinate, and exchange information on the number of lives, persons, and vehicles covered by life and general insurers in each Gram Panchayat. The insurance regulator emphasized close coordination between insurance companies, Gram Sarpanch, and Gram Sachivalaya to achieve full saturation of Gram Panchayats.
The directive from IRDAI, which includes setting increased annual targets for insuring lives in each Gram Panchayat and encouraging insurers to aim for 100% life insurance penetration, is seen as a significant step towards accelerating life insurance adoption, according to Alok Rungta, MD & CEO of Future Generali India Life.
With insurers directed to establish dedicated operational procedures and quarterly review mechanisms, all stakeholders can regularly monitor progress and collaborate effectively to boost insurance adoption at the grassroots level. These new norms are aligned with IRDAI’s recently announced objective of achieving ‘Insurance for All by 2047.’
