Reliance Life Insurance Company is exploring bancassurance partnerships with multiple tiny banks since bigger entities are not available for tie-ups and the regulator is sitting on proposals to allow banks to sell products of multiple life insurers.

Partnership with banks is a new strategy for the private life insurance firm which has so far used a pure agency-based model and built the second largest fleet of agents in the country after LIC.

"I am fundamentally optimistic about the agency model. But there will always be potential disadvantages to non-bank promoted companies," Reliance Life CEO Anup Rau told ET. "So, we are going for tie-ups with smaller banks." Rau said the company is even open to stake-sale for up to 5% to a bank for strategic bancassurance tie up.

Many leading private life insures like SBI Life Insurance or ICICI Prudential Life Insurance are promoted by banks and leverage the vast branch network of their parent company. Others are also relying heavily on partnerships with banks to grow business. LIC has tied up with several banks in the public sector, private sector as well as cooperative banking space.

"Bancassurance is a big distribution opportunity for life insurance industry and partnerships with banks, we feel, are necessary for increasing the insurance penetration in our country," the Rau said.

Debates on allowing banks to sell products of more than one company each in the life or non-life segment has been going on for several years. The Life Insurance Council, an industry association, had suggested that a bank should be allowed to sell products of five different insurers.

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