IRDAI (Payment of Commission) Regulations, 2023 has been published in the Official Gazette on March 27, 2023 with an objective to enhance responsiveness of the regulation to market innovation, facilitate the insurers in development of new business models, products, strategies, internal processes and enable in easy compliance with the Regulations while fulfilling the regulatory objectives and to provide the insurers the flexibility to manage their expenses based on their growth aspirations and ever changing insurance needs to improve insurance penetration.
Highlights of the Regulations are as follows:
1. These Regulation s shall be called the IRDAI (Payment of Commission) Regulations, 2023 and shall come into force from April 1, 2023 .
2. ‘Commission’ has been defined as any compensation including remuneration, or reward, by whatever name called, paid by an insurer to Insurance agent, Intermediary or Insurance intermediary, as applicable, for soliciting or procuring or transacting insurance business.
3. The Regulation requires insurers to have Board approved policy for Payment of Commission which shall be reviewed periodically.
4. The policy shall inter-alia take into consideration the following;
· Interest of policy holders and insurance penetration
· Increases insurance penetration and density in the country
· Nature and tenure of policy
· Interest and enhancement of the performance of Agents & Intermediaries
· Business strategy
· Simplification of administration of business and cost effectiveness
5. The total amount of commission payable:
· for life insurance (including health insurance products offered by Life Insurers) shall not exceed Expense of Management (EOM) limits specified under IRDAI (Expenses of Management of Insurers transacting life insurance business) Regulations, 2023 as amended from time to time.
· for general insurance (including health insurance products offered by General Insurers) and health insurance offered by standalone health insurers shall not exceed Expense of Management (EOM) limits specified under IRDAI (Expenses of Management of Insurers transacting General or Health insurance business) Regulations, 2023 as amended from time to time
6. Insurers to submit the returns on payment of commission within 45 days of the expiration of each financial year and such returns are to be reviewed by the Audit Committee prior to being placed for approval of the Board of the Insurer.
Source category: IRDAI
Attachments
- /2023/165_IRDAI_(Payment_of_Commission)_Regulations,_2023.pdf
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