A bank can continue to buy group insurance covers with any number of insurance companies for the insurance needs of its customers.
Mumbai: The insurance regulator on Tuesday issued guidelines to protect the interest of customers of merging public sector banks covered under group health policies.
The guidelines stated that the underlying group health insurance policies of customers of the merged banks will have to be serviced by the respective insurance companies which issued the policies till the end of policy period. It asked insurance companies to make suitable arrangements with the acquiring banks to this effect.
The government has announced merger of 10 public sector banks (PSBs)—Punjab National Bank, Oriental Bank of Commerce and United Bank of India; Union Bank, Andhra Bank and Corporation Bank; Canara Bank and Syndicate Bank; Indian Bank and Allahabad Bank—under four separate entities. The existing bancassurance regulations allow a bank to tie up with three life, three non-life and three health insurance companies.
The regulator also said the arrangements of the merged banks can be continued with the respective insurance companies for a period of 12 months from the date of merger, subject to the willingness of the acquiring bank to function as the corporate agent for the respective insurance companies.
“Consequent to the merger of few PSBs, in order to protect the interests of the group insurance policyholders of the merged banks, the following guidelines are issued,” the Insurance Regulatory and Develop-ment Authority of India (Irdai) said.
A bank can continue to buy group insurance covers with any number of insurance companies for the insurance needs of its customers. The norms also said that at the end of the current policy period of the group insurance policy of the merged bank, the acquiring bank at its option may continue with the same group insurance policy with the same insurance company, for the customers of the merged bank.
“The acquiring bank may simultaneously continue to have insuranc coverage for its existing customers with its existing insurance company. The acquiring bank can also offer this insurance coverage to the customers of the merged bank with the consent of its insurer.”