You could soon have a wider choice of life insurance schemes including unit-linked pension products from insurers and more banks may be selling those products to you.
The government is on a drive to boost the insurance sector and increase its linkages with banks, as it tries to promote household savings on the one hand and link it up with a big drive to build infrastructure on the other.
Finance minister P Chidambaram has decided to meet chiefs of insurance majors every fortnight to get an update to help iron out regulatory hurdles, government sources said.
The troika of the Insurance Regulatory and Development Authority (IRDA), the Securities and Exchange Board of India (SEBI) and the Reserve Bank of India (RBI) are often locked in turf skirmishes, even as they serve an overall pool of savings that need to be turned into productive investments for economic growth. For example, unit-linked insurance plans involve issues that concern both SEBI and IRDA.
Several issues including a lack of clear guidelines on pensions, bancassurance (use of banks to sell insurance) and micro insurance have pulled down growth in the insurance sector.
Insurance majors have also been complaining that approval for new products takes more than three months now, delaying all operations. Earlier, IRDA used to take about 45 days to give its approval for new products.
After Prime Minister Manmohan Singh sought measures to boost insurance and mutual funds, Chidambaram followed it up with a review meeting with chiefs of life insurance majors on September 4, where it was decided that he would hold fortnightly meetings.
Life insurers have also raised concerns over the constant regulatory changes by IRDA.
"It is a welcome decision that the finance minister has decided to keep a close scrutiny on the industry as there has been a drop in growth due to several factors," said the spokesperson of a Delhi-based life insurance major.
IRDA chairman J Hari Narayan said after his meeting with the finance minister that the regulator would review investment norms for insurers.
"There is a need to revisit investment norms for insurance companies," Hari Narayan said last week.