Friday, November 25 2005 20:09 Hrs (IST) - World Time -

New Delhi: To increase insurance coverage of the poor, the Government has notified micro-insurance regulations that will allow life and general insurers to tie up for offering a combined policy that will cover risks of lives, crop, huts, livestock's and tools at an affordable cost.

TheInsurance Regulatory and Development Authority (IRDA) (micro-insurance) Regulations 2005 allows insurers to issue policies with a maximum cover of Rs 50,000 for general and life insurance.

An insurer can collect the premium for both life and general insurance components directly from the consumer or agents, it said.

Recognizing the need to involve NGOs, self-help groups, micro-finance institutions to distribute such products, IRDA has allowed to act as micro-insurance agents along with certified insurance agents and brokers.

A micro-insurance agent can sell policy of only one life insurer and a general insurer.

The commission for the micro-insurance agents will not exceed 10 per cent of premium for single premium life insurance policies and 20 per cent for other life policies.

The commission for non-life insurance policies is capped at 15 per cent of premium.

The regulator has laid down a set Code of Ethics that has to be followed by micro-insurance agents. If they violate the code, their agency could be terminated.

Insurers have to take IRDA's prior approval for launching micro-insurance products through the 'file and use' mode.