Insurance Regulatory and Development Authority (IRDAI) has recently released revised consultation paper on expense of management and commission. According to this, the regulator has done away with the specific caps on commissions to agents and intermediaries that were earlier proposed in August.
Recommended ArticlesView All
World Bipolar Day: Here's why this disease is still a complex affair despite competent therapies
Mar 30, 2023 IST5 Min(s) Read
This Jadavpur University alumnus has created world’s first energy-saving paint and other amazing stuff
Mar 29, 2023 IST4 Min(s) Read
March F&O Series: Nifty 50 falls over 400 points to mark worst series since September
Mar 29, 2023 IST2 Min(s) Read
Learn how to clear US, UK arrival immigration in 10 seconds from Jet's Sanjiv Kapoor
Mar 29, 2023 IST3 Min(s) Read
It has now suggested that the commissions paid by insurance companies, both life and non-life, should not exceed the expense of management.
The proposed expensive management limit is 30 percent of gross premiums for life insurance companies and 35 percent of gross premiums for standalone health insurance companies.
This will come into effect from April 2023.
Now what will it do for these companies?
It will give significant flexibility to insurers to plan their expenses. It will reduce the compliance efforts and cost and it will also have a lower probability of tax disputes.
It will also help companies like PB Fintech where it substantially reduces the regulatory risk for commission rates.