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The Department of Financial Services (DFS), the Ministry of Finance has proposed some amendments to the existing sections of Insurance Regulatory and Development Authority (IRDAI) Act, 1999 in which it has recommended that general insurance companies should pay share of their profits to insurance agents. It said that the agent should be entitled to the payment of a share in the profits of general insurance business.
Also, insurers should pay bonuses through additional remuneration to their agents so that they can remunerate their staff or employees. However, such a payment should be made on uniform basis.
However, the DFS proposed that IRDAI will continue to hold power to specify regulations, remuneration by way of commission or other wise that an insurer may pay to agent. In addition, IRDAI will specify the code of conduct for an insurance agent.
The department also proposed that at least three persons in the life insurance council and general insurance council should represent insurance agents, intermediaries and policyholders.
In its covering note, the DFS said that the proposed amendments primarily focus on enhancing the financial security of the policyholders, promoting policyholders' interests, improving returns to the policyholders, facilitating entry of more players in insurance market leading to economic growth and employment generation, enhancing efficiencies of the insurance industry - operational as well as financial and enabling ease of doing business.”
