Life Insurance Corporation of India (LIC) Managing Director R. Doraiswamy has said LIC would not recommend introducing an open-architecture model for individual insurance agents, under which agents could sell products from multiple insurers. He argued that individual agents play an important role in providing personalised advice and that allowing them to represent several insurers could affect the nature of the agency relationship and customer servicing. The comments come amid broader discussions around reforms to insurance distribution and competition in India’s insurance sector.
The issue is particularly relevant as regulators and industry stakeholders examine how to make insurance distribution more efficient while improving customer choice, product suitability and insurance penetration. An open architecture could potentially give customers access to products from multiple insurers through one intermediary, but it also raises questions around conflicts of interest, training, product knowledge and accountability. The debate therefore goes beyond commission structures to the larger question of how India’s insurance distribution model should balance competition, professional advice, customer interest and the goal of Insurance for All by 2047.
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