The Insurance Regulatory and Development Authority of India (IRDAI) has released draft regulations proposing a 20% cap on insurance agents’ commission. The draft regulations would also require insurers to have a board-approved policy on commissions, rewards, and remunerations paid to agents.
In the “exposure draft”, IRDAI proposed that the commission payable to agents under general insurance products – including health insurance – offered by general insurers be capped at 20% of the gross written premium “written in India” in a given year. It proposed the same commission cap for health insurance products offered by standalone health insurers.
The regulatory body proposed these policy changes with the twin goals of providing insurers “the flexibility to manage their expenses” while improving insurance penetration in the country.
The IRDAI has requested stakeholders to submit comments and suggestions on the proposed draft regulations by Sept. 14.
