Download Insurance Marketing Firm (IMF) - Insurance Foundation of India

Insurance Marketing Firm (IMF) “
A new Insurance distribution channel for India”
25-02-2013
Insurance Marketing Firm (IMF)
About IMF
This will enable an insurance marketing firm to sell insurance products of multiple insurance companies
and also other financial products, such as mutual funds and National Pension System (NPS), which have
been approved by financial sector regulators.
Why IMF ?
As of now, the insurance broking model allows multiple tie-ups with insurance companies. However,
many brokers don’t prefer to sell insurance to retail customers as it entails heavy marketing expenses.
Instead, they focus on selling large ticket non-life products like group health insurance, motor insurance,
liability insurance etc. to corporate. Also, both agency and broking regulation do not allow distribution
channels to recover marketing expenses from insurers.
Insurance Marketing Firm (IMF)
Scope of IMF
Within insurance marketing firms, there will be two kinds of licensed individuals:
Insurance
Sale person
(ISP)
Financial
Service
Executive
(FSE)
• Solicitation of insurance policies
•Passed Class 10 and cleared the
insurance brokers examination.
•Agent - clear the broker examination and
surrender agency license.
• Carrying out advisory and sales
of other financial products like
mutual funds and pension
products of PFRDA.
Need certification from regulatory bodies
•Maintain net worth of 10 lakhs at all times
•Need professional indemnity policy
The Insurance Marketing
Firm shall designate a
Principal Officer who shall
be the Executive Head of
the Insurance Marketing
Firm and who shall be
responsible for regulatory
compliance to the
Authority on all matters
relating to these
Regulations
Remuneration applicable to the IMF
• The Insurer shall make all remuneration for the Insurance Sales undertaken by an Insurance
Marketing Firm, to the concerned Insurance Marketing Firm only, and NOT to any other sales
/marketing intermediary.
• The remuneration payable to Insurance Marketing Firm by the Insurer, for the solicitation of policies
by the ISP shall not exceed the remuneration as specified by the Authority from time to time.
• In addition the Insurance Marketing Firm can be paid a fee by the insurer, for the following services
i. Marketing Expenses
ii. Expenses towards infrastructure
iii. Performance based incentives
• The Insurance Marketing Firm shall also be entitled to receive the fees for undertaking other
insurance & non-insurance services that will be either mutually agreed between the Insurance
Marketing Firm and the Insurance Company or will be those governed by the stipulation of other
regulatory/ statutory authorities.
• The settlement of accounts by insurers in respect of remuneration of Insurance Marketing Firm shall
be done on a monthly basis and it must be ensured that there is no cross settlement of outstanding
balances.
IMF in conclusion………………
•This is an innovative step which will bring the customer
to the doorstep of the insurer
•This will encourage entrepreneurial spirits
•This will enable insurance companies to increase their
reach to rural and Semi urban areas
•This will improve cross selling
•They would be able to sell products of 2 life , 2 non life
and 2 health companies and also distribute other
financial instruments.
•More opportunity to cover the uninsured population
Thank you
25-02-2013