hyderabadmumbai the insurance regulator is reviewing rules that restrict banks from selling policies of rival insurance companies the proposed move aimed at giving more choices to customers of banks may upset the multicrore distribution arrangements between banks and insurers and force them to review their strategies currently a bank can sell insurance products of one life and one general insurance company only insurance brokers are allowed to sell policies of competing insurers we have set up another group to look at the bancassurance scheme in depth and are awaiting their report a review of the scheme is top on our agenda for this fiscal said insurance regulatory development authority of india irda chairman j hari narayan an earlier panel chaired by former lic chairman nm govardhan was not in favour of banks selling policies of competing insurers the industry is divided on the issue as one section reckons that banks should be allowed to tie up with multiple insurers in a free market environment said hari narayan most of the large life insurers sbi life icici prudential hdfc standard life earn a significant portion of their premium through sales by a group bank even among the smaller insurance companies such as kotak metlife and aviva a large part of the premium comes from their bank partners besides established companies there are newly formed ventures and prospective joint ventures by public sector banks which may have to review their plans if irda allows multicompany distribution these include the two recently formed threeway joint ventures the canara bankoriental bankhsbc jv and the union bankbank of india daiichi jv another joint venture having bank of baroda andhra bank and uk insurer legal general as partners is also on the anvilfor new generation life insurance companies over a fifth of their premium come from policies sold by bancassurance partners according to some estimates but agents continue to be the mainstay of distribution for stateowned life insurance corporation banks can sell policies by registering themselves as a corporate agent like individual agents they are tied to an insurance company banks also receive commission for referring customers to life insurers today only insurance brokerages can sell policies for more than one company however a broking licence is allotted to only those entities that are set up for the purpose of insurance distribution and the senior management of brokerage firms have to be insurance qualifiedbanks are already offering their customers an array of mutual fund schemes from various companies those in favour of multiple products argue that a few insurance companies should not be allowed to corner large banks they also reckon that customers of banks should have more choice in buying policies but a section opposing the move says that insurance products are much more complex than mutual funds and no sales executive would have the expertise to be conversant with the features of all products of all life and non life insurance companies insurers also apprehend that if banks are given