MICRO INSURANCE IN INDIA

-As a part of developmental role, Insurance Regulatory and Development Authority (IRDA) finalized and issued guidelines on Micro insurance on 10thNovember, 2005 after discussing it at various forums. Micro insurance will meet the need for having insurance products which can be afforded by the rural and urban poor. The Regulations on Micro insurance provides a platform and rules to procure insurance for the targeted segment of the society. The regulations provide for a tie up between a life & a non-life insurance company for distribution of insurance products to improve the penetration of insurance in the selected segment. Thus cross-selling is permitted in this area by the IRDA. For encouraging the sale of Micro insurance products, the Authority has mandated that these would form part of the social and rural obligations of an insurer prescribed under the provisions of the Insurance Act, 1938. The aim of this paper is to throw some light on the micro insurance guidelines in India and also to see speed of its growth as in India, more than two-third of the population lives below poverty line and therefore the importance of micro finance is undeniable.