A landmark ruling by India’s insurance regulator has opened the world’s largest post office network for the insurance industry.

New guidelines by the country’s Insurance Regulatory and Development Authority (IRDA) will allow insurance to be sold across India Post’s network of 155,000 offices – a bonanza for insurers in a country where insurance premiums account for less than 1% of GDP.

India Post’s offices have been divided into 22 regional “circles”, with each circle acting as a corporate agent.

Each circle is permitted to enter into an agency agreement with two life insurance companies, two non-life insurance companies, an agricultural insurance company and a health insurance company.

The head of each circle may also apply to the IRDA for permission to break up the circle into smaller units, with each unit acting as a separate corporate agent.

Insurers will be forbidden from selling customer data under referral arrangements.

Deregulation in 1999 allowed foreign players into the Indian insurance market for the first time, prompting a burst of activity that turned India into one of the world’s fastest growing insurance markets.

Despite poor penetration rates, India is still the world’s fifth largest insurance market, with a total value of $US41 billion, according to the Life Insurance Council.