Creation of new Insurance Distribution Channel -Motor Insurance Service Provider (MISP) - Impact on stakeholders in General Insurance Sector in India

On August 31, 2017, the IRDAI (Insurance Regulatory and Development Authority of India)notified the "Guidelines on Motor Insurance Service Providers"(MISP Guidelines) to identify and regulate the role of the automobile dealers in distributing and servicing motor insurance products. The compliance of this guideline came into force from November 1, 2017. This gave birth to a new distribution channel or intermediary in non-life insurance. The IRDAI with this step recognised the role of automobile dealers and aimed to give legitimacy to existing practices of solicitation and servicing of motor insurance by automobile dealers in India. The paper seeks to study what led IRDAI to create a new channel and what would be the likely impact in coming times on various stakeholders of this new distribution channel.