IRDAI’s new commission rules may affect PSU insurers
What was being done in a clandestine manner by the industry players, the the Insurance Regulatory and Development Authority of India (IRDAI) has legalised the same with the new norms, said a senior industry official.
image for illustrative purpose
Chennai What was being done in a clandestine manner by the industry players, the the Insurance Regulatory and Development Authority of India (IRDAI) has legalised the same with the new norms, said a senior industry official.
The official also said the new norms will affect adversely the government owned general insurers and an advantage for mid and large sized private insurers.
The IRDAI had recently notified its regulations whereby, the policy segment wise ceiling on commissions payable to the distributors has been abolished. As per the new regulations, there will be only one ceiling, that is the Expenses of the Management and insurers' spend has to be within that ceiling.
"In the case of general insurance companies the Expenses of the Management is freezed at 30 per cent and for standalone health insurers it is 35 per cent," the official said.
The official also said, earlier the private companies have been paying their distributors over and above the specified limits. Now, the new regulations have legalised the same. "No more the insurance companies - life and general insurers - will get notices from the Goods and Services Tax (GST) Authority," the official said.
Industry officials have said that the insurers - life and non-life - have been paying their product distributors over and above what has been prescribed under various heads.
