Bharat Overseas Bank to market life and non-life products

Chennai: The city-based Bharat Overseas Bank will take advantage of the Reserve Bank of India’s (RBI) guidelines for banks to market life and non-life insurance products on a referral basis.

G Krishna Murthy, the chairman and CEO of Bharat Overseas Bank, says the bank is in talks with a couple of life and non-life insurers in this regard.

Under the referral system, banks will not be termed as a corporate agent to an insurer. Instead, banks will offer space to insurers in their premises and earn commissions for the sales conducted in these premises. The deal is akin to the ones done by retailers who sublet space within a store.

The referral system’s advantage is that bank staffers need not undergo the regular training schedule prescribed by the Insurance Regulatory and Development Authority (IRDA). Further, banks can enter into referral agreements with multiple insurers, unlike a corporate agent who can only sell the products of just one insurer.

ICICI Prudential Life Insurance has already entered into such a referral agreement with Bank of India.