Commission paid to agents to be mentioned on insurance cover note - What IRDAI proposed

Insurance Policy Commission: In order to prevent misselling and increase transparency in insurance policies, the committee formed by Insurance Regulatory and Development Authority (IRDAI) has proposed a proposal in which the commission paid to agents will be mentioned on the insurance cover note. The board meeting will be held on 15 July 2022 and a decision is expected on the same day. A source tells Zee Business Anurag Shah.

According to the source, in the coming days when someone buys an insurance policy or pays the policy premium, he or she will know how much commission the insurance company has paid on the platform from where they bought the policy or the agent who sold them the policy. This will be written on the premium receipt of the policy, said the source.

A decision on this can be taken at the board meeting on 15 July. Whereas opposite to this, brokers and aggregators have opposed the proposal and arguing that giving commission details on the policy can encourage corruption.

The agent's commission will be recorded on health, life, and general insurance policy receipt, the source said.

The detailed commission proposal is given below:

Maximum Commission                                         First-Year                 Renewal Premiums

Life Insurance Individual Pure Risk                            40%                          10%

Life Insurance Deferred Annuity / Pension                 7.5%                         2%

Life Individual Other than Pure Risk                           35%                         7.5%
 
Maximum Commission

Health Insurance Individual 15%

Motor Insurance 20%

Fire Insurance 16.5%