Common Service Centres (CSC) in insurance

What are Common Service Centres in insurance?

Common Service Centres (CSCs) are village and small-town kiosks, set up under the Digital India programme, where local entrepreneurs deliver government and private services such as certificates, bill payments and banking. Insurance is one of those services. A CSC operator who is trained and certified can sell simple life, general and health policies, help customers renew motor policies, and assist with claims, all from the same counter.

In insurance regulation the network is called a Common Public Service Centre (CPSC). It operates through a special purpose vehicle set up by the government, CSC e-Governance Services India Limited, which registers with IRDAI and signs agreements with insurers.

How CSC insurance distribution works

The framework is the IRDAI (Insurance Services by Common Public Service Centers) Regulations, 2019, which replaced an earlier 2015 version.

• The SPV. The CPSC-SPV holds the IRDAI registration, appoints a principal officer for compliance (a graduate) and signs an agreement with each insurer whose products it offers.
• Sellers. Two kinds of individuals sell: rural authorised persons (RAPs) and village level entrepreneurs for insurance (VLE-Ins). Both need at least a matriculation pass and 20 hours of training from a recognised institute, followed by an examination.
• Products. Life products of the kind permitted for POSPs, microinsurance, government schemes underwritten by insurers and other products IRDAI allows. For general and health insurance, the same categories apply with limits twice those set for POSPs. Post-sale motor services such as renewals and endorsements can carry a service fee.
• Pay. Commission is in line with agents' commission. The SPV must pass at least 90% of what it receives to RAPs and at least 85% to VLE-Ins, settled monthly.

2026 changes. The IRDAI (Insurance Intermediaries) (Amendment) Regulations, 2026 made the SPV's registration permanent subject to an annual fee (the higher of ₹10,000 or 0.04% of commission and other receipts from insurers). The SPV must apply for a fresh certificate before 31 January 2027. It must also keep policy-wise records showing which RAP or VLE-Ins sold each policy, with that person's functional identity printed on the proposal, policy and certificate. If the SPV's registration ends, its policyholders are serviced by the insurers.

What CSCs mean for distribution

• Reach without branches. CSCs exist in places where insurers have no office and few agents. For an insurer meeting its rural and social sector obligations, a CSC tie-up gives presence at low fixed cost.
• The VLE is a trusted local, not an insurance specialist. VLEs handle many services, and insurance competes for their time with faster transactions such as bill payments. Simple products, quick issuance on a basic device, and clear commission on renewals keep insurance on their list.
• Government schemes open the door. CSCs are a common enrolment point for government-backed covers such as crop insurance. A customer who has enrolled once is easier to approach for a personal accident or term cover later.
• Claims support decides reputation. In a small community, word of a delayed claim travels quickly. Insurers that give VLEs a direct claims helpline and status tracking protect the channel's credibility.
• Training must be practical. Twenty hours covers the rules, but VLEs also need scripts on what each product does not cover, how nominations work and when a policy lapses.
• Reform may merge the category. IRDAI's September 2026 consultation paper proposes folding common service centres into a single Insurance Distribution Entity licence, and RAPs and VLEs into one of four categories of Insurance Distribution Persons. It also proposes extra commission, above the normal caps, for sales in towns under 50,000 people and in rural areas. These are proposals open for comment until 25 October 2026.

CSC vs Bima Vahak vs POSP