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05 March, 2015 18:45 IST
Allowing banks to act as insurance brokers positive for industry, says insurance cos
Source: IRIS | 28 Feb, 2013, 06.49PM
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The finance minister P Chidambaram presented an overall neutral Union Budget. As expected, Chidambaram has made steep hike in allocation to social and rural schemes, eyeing general elections due next year. At the same time, he has pegged fiscal deficit at 4.8% for next fiscal to avoid possible rating downgrade. However, it was disappointing for most industries, which are looking at growth stimulus and for common man looking at reduction in taxes.

Miranjit Mukherjee, CFO & Senior VP-Finance, Tata AIG General Insurance said, ''Overall the Union Budget has assisted the Insurance industry to widen its reach and distribution network. Though the Industry had hoped for tax exemptions in health and other segments, the end-customer will gain through the wider reach of insurance in smaller towns and through the bank's distribution network. By and Large the Fiscal Deficit /CAD remains a concern and we will be eager to see how this Union Budget affects the same in the coming fiscal year.'' 

AS Narayanan, Chief Distribution Officer, Bajaj Allianz Life Insurance said, ''Some of the positives of the budget proposals for the life insurance industry are allowing banks to function as insurance brokers, banking correspondents to sell micro-insurance products, additional tax exemptions for insuring a disabled person and extending group insurance to many more groups would in providing the much needed life insurance protection to these segments. The move to unify KYC norms for banks and insurers will simplify the process for buying insurance, thereby making it more customer friendly. Lastly, allowing insurance companies to become trading members of debt stock exchanges will bring down the cost for insurers.''

Jayant Dua, CEO & MD, Birla Sun Life Insurance said, ''Steps to allow banks to act as brokers for selling insurance products of multiple companies will give customers more choice and will allow life insurance companies to make further inroads in the years to come. KYC documents of banks can be considered as surrogates for issuance of policies by insurance companies. This will bring customer convenience at the point of purchase and will provide ease of processing for the insurance companies. There are further recommendations that aim to enhance the penetration of insurance products in the country.''

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