What a POSP Is Allowed to Sell: The Restricted Product Scope Explained

A point of sales person is defined by what they may not sell. The POSP route exists so that someone with a 10th standard pass and fifteen hours of in-house training can lawfully solicit insurance, and the trade for that low entry bar is that the products on offer are pre-selected by IRDAI, pre-underwritten, and standardised to the point where the person selling them exercises no underwriting judgement at all. Remove the restricted list and the channel loses its justification.

The governing principle reads the same way across the instruments: a POSP may solicit and market only those products specifically approved by IRDAI as POS products, being simple, standardised contracts that require minimal underwriting intervention. Everything else in the POSP rulebook follows from that one idea. The POS Code stamped on every proposal, the four working day issuance clock on life products, the tie to a single principal: each of them is an operating consequence of a channel built for contracts that price themselves.

The instruments that set the scope are older than most advisors assume, and none of them is a 2024 regulation:

• Non-life and health: Circular No. IRDA/Int/GDL/ORD/183/10/2015, the Guidelines on Point of Sales Person for non-life and health insurers, later modified by Circular No. IRDA/INT/GDL/PSP/058/031 2017 dated 16 March 2017.
• Life: the two guidelines dated 7 November 2016, one on POS products (IRDA/LIFE/GDL/GLD/222/11/2016) and one on the POS person (IRDA/LIFE/ORD/GLD/223/11/2016), later consolidated into Master Circular No. IRDAI/LIFE/CIR/MISC/215/12/2019.

The life master circular sets out the POS-Life categories, and the list is short:

1. Pure term insurance, with or without return of premium
2. Non-linked, non-participating endowment products
3. Immediate annuity products
4. Non-linked, non-participating health insurance products
5. Microinsurance products

Read the list for its shape rather than memorising it. Every item prices off age, sum assured and a short declaration. Nothing on it carries a market-linked fund value, a bonus that has to be explained at the kitchen table, or a participating surplus whose illustration a household could misread. The list is exhaustive, so a life product that is not one of these five is not a POS-Life product, whatever its brochure says. Unit-linked products are absent. Participating products are absent. So is deferred annuity, since only immediate annuity is named.

Two further rules from the same master circular do more work than advisors expect.

The premium paying term must equal the policy term. The circular puts it directly:

The premium paying term under a POS-Life Product shall always be equal to the policy term.

That single sentence removes every limited-pay structure from your scope. A twenty year endowment with a ten year paying term is a perfectly ordinary life product and it is not a POS-Life product. The commercial consequence runs the other way too: on a POS-Life contract you are collecting a premium from that household in every year of the term, which makes lapse, revival and the renewal calendar your entire economics.

Issuance must not exceed four working days. The turnaround limit is worth reading as a design statement rather than a service standard. A contract that must be issued within four working days of the proposal is a contract nobody is underwriting by hand.

The non-life and health guidelines opened the channel with a set of retail covers that behave like commodities:

• Motor, both the package policy and standalone third party or Act-only cover, across two-wheeler, private car and commercial vehicle
• Travel insurance
• Personal accident
• Home insurance

That original set is the honest starting point. What matters for an advisor working in 2026 is that the non-life POS list has been widened beyond it over the years, and now extends to certain health and rural covers. This post deliberately does not itemise the current list, because the itemised versions in circulation do not come from IRDAI.

The reason to be pedantic about this is that a product-scope breach is not an argument you win afterwards. Your POS Code sits on the proposal. The insurer is required to record it. A policy solicited outside the approved scope is attributable to you by construction, and the person carrying the regulatory consequence is your principal, who will look at the same record and reach the obvious conclusion about the tie.

Once you see the common feature, the boundary stops being a list to memorise and becomes something you can reason about. Every POS product prices the buyer's risk from a small number of declared facts that the buyer already knows.

• Term: age, sum assured, a short health declaration.
• Motor: make, model, year, variant, insured declared value, previous claim history.
• Travel: trip dates, destination, age band.
• Personal accident: occupation class and sum insured.

Nothing in those inputs requires a person to form a view. Turn the test around and the exclusions fall out on their own. A product that needs a medical examination, a surveyor's pre-inspection, a risk questionnaire scored by an underwriter, a rate negotiated case by case, or a wording adjusted by endorsement to fit one buyer's circumstances is by construction not a POS product, whichever line of business it sits in.

The approval attaches to products, not to lines

This is the part that catches experienced advisors. "Motor is a POSP line" is a useful shorthand and a misleading one. A product is a POS product because it was filed and approved as one. Two motor policies from two insurers on your principal's panel need not share POS status, and an insurer can approve a POS variant of a product alongside a fuller version that is not in your scope and looks almost identical on a comparison screen.

It is worth naming the exclusions plainly, because the ones that get advisors into trouble are the ones a friendly client asks for.

Commercial lines. Fire cover on a factory shed, marine cargo, contractors all risks, machinery breakdown, group health for an employer, any liability programme. These are underwritten against a specific risk by a specific underwriter, which is the exact activity the POS design removes. They are not POSP products.

Surety bonds. A surety bond is a three party contract of guarantee in which an IRDAI-licensed general insurer guarantees a project owner that a contractor will meet its obligations, governed by the IRDAI (Surety Insurance Contracts) Guidelines, 2022. It is underwritten against a contractor's balance sheet and track record. It is an active, liberalising market and it is not on any POSP-permitted list.

Title insurance. IRDAI has approved title insurance products, which protect a property owner against loss from title defects, and under the RERA Act a promoter must obtain such insurance as may be notified for title of land and construction of the project. It is a promoter and developer product, filed through the ordinary product-filing route. It is not a POS product.

The pattern is consistent. If a human being has to form a view about one specific risk before the contract can be priced, the product is outside your scope.

So what do you do when a client with a two-wheeler policy from you mentions their new workshop needs fire cover? You hand it to your principal, or to a channel that is licensed to place it, and you do not sign the proposal. The relationship survives the referral. It does not survive a policy solicited by someone who was never authorised to solicit it, and neither does the tie that lets you work.

A narrow scope sounds like a ceiling. In a household it is closer to a floor, because the POS list happens to contain the policies almost every Indian family already buys: a two-wheeler or private car policy, a personal accident cover, travel when someone flies, term for the earning member, and health. What the scope actually removes is the option of growing through bigger and more complicated single sales. The only lever left is depth, and depth is measured in one place: how many policies and how many renewal dates you hold for the same household.

That makes three unglamorous things the whole job.

1. The renewal calendar. Motor renews every year and a lapsed motor policy is a legal problem for the client, not just a coverage gap. Health renews annually with a grace period. A POS-Life contract, where the premium paying term equals the policy term, wants a premium from that family in every year of the term. Lapse and revival are not admin; they are your income and the client's cover, together.
2. The product register. Which specific products, from which insurer, are POS-approved for you today, checked against the IRDAI POS page and your principal's master rather than a forwarded list.
3. Your own record of what you sold. Whose policy, which cover, which dates, what you earned on it. Reconciled per policy against what your principal's statement says, not accepted from it.

One closing note on the reform noise, because it reaches advisors as rumour. As of the date of this post IRDAI's consultation paper on commission rules had not been published. Chairperson Ajay Seth indicated it was expected by end-July 2026, and the ideas reported in early July 2026 (spreading commission across the policy life instead of concentrating it upfront, product-wise caps differentiated by complexity and tenure, tighter disclosure of remuneration to policyholders and the regulator) are proposals, not rules. None of them changes what you may sell. Product scope and remuneration live in different instruments, and the scope is set by the 2015, 2016 and 2019 documents above.