Claims under insurance policies sold online would be settled in the same way as policies sold using conventional method, Parliament was informed on Tuesday.
 
In a written reply to the Rajya Sabha, Minister of State for Finance Namo Narain Meena said as per the information from the Insurance Regulatory and Development Authority (IRDA), some insurance companies resort to sale of insurance products through their websites or portals in addition to sale through the conventional distribution channels.

"Settlement of claims depends on the terms of policy contract rather than mode of sale. Therefore, claims under policies sold online would be settled in same way as policies sold on other modes so long as the terms of policy contract are the same," Meena said. He also said that as yet there is no proposal from any insurer for sale of their entire policies on online mode.

"Insurance is sold through multiple modes such as face-to-face, telecalling and online. So far as online is concerned, it affords a non-intrusive and easy purchase of insurance at a time convenient to the buyer from wherever he is located without the involvement of an intermediary," he said.

Meena said that as per census 2001 data, the Insurance Regulatory and Development Authority (IRDA) has reported that the approximate number of insurable persons in the country is 57,03,35,944.

"The IRDA has informed that the details of insured persons, institutions, etc. company-wise are not maintained," he said, adding that no detail of people belonging to Above the Poverty Line (APL) and Below the Poverty Line (BPL) category are maintained.

As on March 31, 2010, the total number of policies in force relating to private life insurers were 4,03,63,200 and the lives covered under group new business by private life insurers were 4,19,59,796. According to the minister, insurance penetration has increased from 2.32 per cent to 5.51 per cent over 2000-2010 period.

"The number of insurance offices has increased from 2,199 in 2000 to 12,018 in 2010.From the single channel system of tied agents which was predominant before opening up of the sector in 2000, multiple channels of distribution comprising brokers, bancassurance, corporate agents emerged in the decade and accounted for nearly 21 per cent of the new business in the year 2009-10," Meena said.

The first year life insurance premium grew from Rs 19,857.28 crore in 2001-02 to Rs 1,09,894.02 crore in 2009-10. Meanwhile, the total life insurance premium rose from Rs 50,094.46 crore in 2001-02 to Rs 2,65,450.37 crore in 2009-10, the minister added.

In reply to another question in Rajya Sabha, the minister said that there have been some concerns in the recent past about high interest rates, coercive recovery processes and multiple lending practiced by some micro finance institutions.

"In order to study these and other related issues and implications for its policies and given the useful role played by the micro finance institutions in providing access to financial services to the poor and excluded, the Reserve Bank set up a sub-committee... study the issues and concerns in this sector, including ways and means of making interest rates charged by them reasonable," he said.

The sub-committee, headed by RBI director Y H Malegam has submitted a report in this regard. Bank loans to MFIs have been given the status of priority sector. A margin cap of 12 per cent for all MFIs and interest cap on individual loans at 26 per cent per annum for all MFIs have been fixed, besides directing them not to charge any penalty for delayed payment.