IRDAI has done away with the requirement of sending reports on agents and intermediaries commission.
Since the existing reporting format does no capture information on rewards, IRDAI has withdrawn reporting on payouts to insurance agents and intermediaries with immediate effect.
So far, insurance companies were required to report details of policies sold and commission paid to agents and brokers in a prescribed format. Insurers had to submit details of first year commission, commission on single premium policies, renewal commission and additional payout within one month of the completion of every financial year i.e. before April 30.
However, the insurance regulator has signalled that it would modify such a reporting format to comply with existing norms on commission and rewards of agents and brokers.
Earlier in February 2017, IRDAI had allowed insurance companies to reward insurance intermediaries such as individual agents, corporate agents, brokers, web aggregators and insurance marketing firms with incentives. The rewards would be paid in the form of benefits such as insurance cover, gratuity, office expenses, promotional gifts etc.
While the insurance regulator has allowed life insurers to pay up to 20% of the first year commission as rewards to insurance intermediaries, such incentives would go up to 30% of the first year commission for insurance agents in general insurance.
In the circular, IRDAI said, “The existing reporting formats and specified in the regulations do not match and the existing reporting formats do not capture information on rewards. In light of the same, the authority is of the view that these existing reporting formats require significant modification. Accordingly, the earlier circulars for reporting of payouts to insurance agents and insurance intermediaries stand withdrawn with immediate effect. Hence, furnishing of data to the authority in compliance of the said circulars is not required.”