To increase insurance penetration in the country, the industry needs more distributors to travel the last mile. To achieve that goal, what’s needed is a simple certification process for these distributors. So, to get such distributors on board quickly, the Insurance Regulatory and Development Authority of India (IRDAI), in 2015, allowed for a new type of distributor, called the point of sale (PoS) person.
Given that these individuals have a lower qualification and training threshold, compared to other insurance distributors such as agents, brokers and corporate agents, IRDAI has allowed these individuals to sell only basic insurance products, which don’t require a lot of underwriting.
Mandate of a point of sale person
As per the regulator, products such as motor insurance, travel insurance and personal accident insurance require very little underwriting as they are based on information provided by the prospect. Also, such insurance policies are automatically generated by the system.
Therefore, the intervention required for such products is minimal and the training and exams for such persons could be of a lesser degree than those for a full-fledged distributor.
In fact, last year in November, IRDAI had allowed the life insurance industry to use a point of salesperson to sell life insurance products. For this, it identified products that are simple to understand, and in which the benefits are stated upfront and they are fixed and predefined.
Accordingly, IRDAI identified pure-term insurance plans with and without return of premium, non-linked (non-participating) endowment plans that state the investment benefits upfront and immediate annuity as products that can be sold by the point of sale persons.
And this year, in order to ensure faster certification of point of sale persons, the regulator has relaxed the certification programme by allowing the insurers or intermediaries hiring them to train and examine these individuals in-house.
A new training programme
Point of sales persons can be engaged either directly by insurers or by intermediaries such as corporate agents and insurance brokers. The minimum educational qualification of such persons is Class 10 and they should be 18 years of age at least. Earlier, as per the rules, IRDAI had appointed the National Institute of Electronics and Information Technology (NIELIT) to conduct the examination of certificates for point of sale persons.
But in a notification dated 7 February, IRDAI removed this condition for the life insurance industry. Training and certification from NIELIT is no longer mandatory. As per an insurance official, this was done after representations were made to the regulator that this could hamper quick on-boarding of point of sales persons.
Accordingly, IRDAI has allowed in-house training by the insurer or intermediary engaging the point of sale persons. They will have to conduct an in-house training of 15 hours and an examination thereafter. The insurer or the intermediary will then issue a certificate and maintain the records for at least 5 years.
IRDAI has, however, prescribed a model syllabus for training purposes. As per the insurers we spoke to, the syllabus has been drafted by the Life Insurance Council and IRDAI, and will be used by all the insurers.
