The Insurance Regulatory and Development Authority (IRDA) has asked insurers to develop products to be marketed exclusively through Common Service Centres (CSCs).
In its guidelines on the CSC model, the IRDA had said that these products should not have a sum assured exceeding Rs 2 lakh (except motor insurance) per life or risk.
In its regulations, IRDA said for solicitation of insurance business, CSC would have a Rural Authorized Person (RAP), who would have to complete 20 hours of theoretical training from a recognized institution and, subsequently, undergo an examination.
The RAP would assist customers in selecting policies according to their needs. He would also provide detailed information about customers to the insurer and offer customer servicing services.
For a CSC special purpose vehicle to become an insurance intermediary, it would have to apply for a license from IRDA. This license would be valid for three years, after which it can be renewed for another three years.
The CSC model is an initiative of the National e-governance plan. It is aimed at providing high-quality and cost effective video, voice and data content, and services in the areas of e-governance, education, health, tele-medicin, banking and financial services, utility payments and entertainment etc.
The centre has plans to roll-out 1, 00,000 CSCs across the country with a focus on rural areas. Each CSC is expected to serve a cluster of 6-7 villages, covering about 6, 00,000-7, 00,000 villages across the country.
The CSC public-private partnership model envisages a three-Tier structure –the CSC operator, the service centre agency (responsible for a division of 500-1,000CSCs) and a state government designated agency responsible for managing implementation across the state.
As per insurance companies, CSC model would reduce distribution cost about 30 % in rural areas, as these activities would be carried out by RAPs.