Banking On Exclusive Tie-Ups: Distribution Channels Of Insurance Joint Ventures

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One of the most debated issues in the insurance sector is whether there should be regulatory reform of existing insurance distribution channels. Globally, there are precedents of insurance companies utilising multiple corporate agents, including banks, to distribute insurance products. However, certain jurisdictions had legislation which were, in effect, barriers to banks getting involved in insurance distribution. For example, the Glass-Steagall Act, 1933 prevented American banks from entering into arrangements with different providers of financial services (including insurance companies). However, with the replacement of the Glass-Steagall Act in 1999, the banking sector began to warm up to fee-based distribution arrangements.