Centre clears IRDAI's new commission norms for insurance intermediaries

Mumbai, Mar 28 2023

Regulator wants every insurer to have a written policy for payment of commission

The central government has cleared the insurance regulator’s new regulations on payment of commissions for intermediaries, allowing insurers greater autonomy in deciding amounts they want to shell out.

Segmental limits on commissions will be removed from April 1 and the fees paid to intermediaries such as individual agents or corporate agents will be based on the expense of management (EoM) limit specified by the Insurance Regulatory and Development Authority (IRDAI).

A central government gazette notification said the total amount of commission payable under life insurance products, including health insurance products, shall not exceed the EOM limits specified under Insurance Regulatory and Development Authority of India (Expenses of Management of Insurers transacting Life insurance business) Regulations, 2023 as amended from time to time.

Similarly, the total amount of commission payable under general insurance products, including health insurance products offered by general insurers and health insurance products offered by standalone health insurers shall not exceed the EOM limits specified under Insurance Regulatory and Development Authority of India (Expenses of Management of Insurers transacting General or Health Insurance business) Regulations, 2023 as amended from time to time.

The previous guidelines on commissions to intermediaries will be repealed by the insurance regulator.

The regulator’s new guidelines want insurers to have a written policy for payment of commission, which would be approved by the companies' boards of the insurer and reviewed periodically.

[The Business Standard]