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Microfinance institutions are charging very high service charge on the sale of micro-insurance products, according to the Insurance Regulatory and Development Authority.
In his message at a national conference here on Tuesday on Financial Inclusion — Integrating Insurance into Total Package, Mr J. Hari Narayan, Chairman, IRDA, said microinsurance was generally sold by microfinance institutions as a bundled product with loans.
“We have noticed in several cases that the entity offering the loan and hence the microinsurance product, tends to charge a very high rate for this service,’’ he said.
Microinsurance should not be seen as an adjunct to microfinance programmes. They must be seen as low-ticket insurance policies, he added.
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