August date for bancassurance guidelines: IRDA

 Sudhin Roy Chowdhury, Member (Life) IRDA recently said that the final guidelines on bancassurance are likely to be out in the month of August.. “We have debated and redebated and now we are trying to tie up loose ends. The whole idea was that all insurance companies should get a pie of the bank. This will help the industry grow,” he said.

He added that out of the total 80,000 bank branches across the country only around 20,000-30,000 branches are currently selling insurance. “A lot of growth can be achieved if the rest of the branches also start selling the products,” he said. The regulator was considering the appeal made by insurers to have a tie-up with five or more banks.

He further said that the IRDA has been in talks with the Union Finance Ministry for waiving off service tax levied on the savings part of the life insurance premium as waiver of service tax from the savings part could help boost the life insurance business in India.

According to the existing regulations, a bank can only tie up with one life, one non-life and one standalone health insurance company and service tax is levied on the total premium amount.