Regulation: Customer Bank Account Needed To Buy Insurance  

June 12, 2014

Will it impact LIC’s business?

Raj Pradhan

Insurance Regulatory and Development Authority (IRDA) norms, effective 1st April, make it mandatory for insurers to seek bank details of customers buying new policies. This move is expected to hit Life Insurance Corporation of India’s (LIC) business due to its tremendous reach in the rural market where cash is the preferred option for small-ticket policies. It is estimated that 40% of insurance premiums are paid by cash, which means there is a substantial number of customers who may not have a bank account. Insurers promoted by banks may not be as...

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