In a move that would help general insurance companies, IRDAI has allowed them to increase or decrease premium amount by 5% to comply with the new commission guidelines of the insurance agents and intermediaries.
In a circular issued today, the insurance regulator has said, “The regulations bring about certain revisions in commission/remuneration rates and also introduce the reward system. These may trigger insurers to revisit the pricing of their products as far as the costing input relating to commission/remuneration is concerned. ln this backdrop, it has been decided that general insurers who wish to revise the pricing of their products as a result of the new regulations, may do so without having to file a modification to the product under the product filing guidelines.”
However, IRDAI has clarified that the change in price would be limited to the extent of change in commission/remuneration including rewards.
In its new commission guidelines, the insurance regulator has hiked the commission structure in most of the non-lifepolicies to 15% of the premium. So far, general insurers were paying up to 10% as commission on most of the non-life policies.
The new commission guidelines will come into effect from April 1, 2017.