With reference to Bancassurance agreement, consider following statements

1. It refers to the distribution of the insurance and related financial products by the Banks whose main business is not insurance.
2. For Bancassurance, the Banks need to obtain a prior license from the Insurance Regulatory and Development Authority, so that they can work as “Composite Corporate Agent.
3. As per bancassurance regulations, a bank can only market three life, general and health insurance companies’ products. 

Select the correct statement.

• Bancassurance or Bank Insurance Model refers to the distribution of the insurance and related financial products by the Banks whose main business is not insurance. So, simply Bancassurance, i.e., banc + assurance, refers to banks selling the insurance products.
• Bancassurance term first appeared in France in 1980, to define the sale of insurance products through banks’ distribution channels.
• For Bancassurance, the Banks need to obtain a prior license from the IRDAI or Insurance Regulatory and Development Authority, so that they can work as “Composite Corporate Agent” or may have “Referral Arrangement” with the Insurance Companies. 
• As per bancassurance regulations, a bank can only market three life, general and health insurance companies’ products. The banks that have been merged with them also had bancassurance business.

By: Shubham Tiwari