Irdai notifies a consolidated regulation on expenses of management
Jan 26, 2024
The RRC recommended the IRDAI (EoM, including commission, of insurers) Regulations 2023, after repealing three separate regulations
The Insurance Regulatory and Development Authority of India (IRDAI) has released a consolidated regulation on Expenses of Management (EoM), including commissions, based on the Regulation Review Committee's (RRC's) suggestions.
In November 2023, IRDAI had released an exposure draft on the EoM, including commission for both life and non-life insurance companies, based on the recommendation from the RRC. The RRC had recommended merging the commission-related regulations with the EoM regulations to create a single regulation instead of maintaining separate ones.
The RRC recommended the IRDAI (EoM, including commission, of insurers) Regulations 2023, after repealing three separate regulations.
The new regulations will come into force from April 1, 2024, and will remain in force for a period of three years thereafter. The regulator had given a deadline of up to December 6, 2023, for the stakeholders to give their comments and suggestions on the same.
The three repealed regulations are: the Insurance Regulatory and Development Authority of India (Expenses of Management of Insurers Transacting General or Health Insurance Business) Regulations, 2023; the Insurance Regulatory and Development Authority of India (Expenses of Management of Insurers Transacting Life Insurance Business) Regulations, 2023; and the Insurance Regulatory and Development Authority of India (Payment of Commission) Regulations, 2023.
“This draft is based on the suggestions from the RRC given in November 2023 to merge the three separate regulations. As a matter of simplification, the three regulations were merged into one, and it does not have any substantial change from the initial one,” said an industry official who did not wish to be named.
The IRDAI had directed the Councils to constitute a RRC comprising representatives from all stakeholder groups for the purpose of enhancing ease of doing business and simplifying regulations by moving towards a principles-based regime with a view to making them more effective.
[The Business Standard]
