Banks may find the going tough in distributing insurance polices. The insurance regulator may require them to renew at least half the life insurance policies they sell, failing which they risk losing the licence to distribute insurance products.
The renewal requirement is one of the recommendations of a committee set up by the Insurance Regulatory and Development Authority (IRDA) in order to curb mis-selling.
In 2011, IRDA had ushered in a minimum policy renewal criteria for individual insurance agents. The regulator directed insurance companies to terminate the contracts of agents who fail to get at least half the policies sold by them renewed in the subsequent year.
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