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IRDAI has recently released its minutes of the 121st meeting in which IRDAI has approved its two key regulations - IRDAI (Payment of Commission Regulations), 2023 and IRDAI (Expenses of Management of Insurers transacting General or Health Insurance Business) Regulations, 2023.
While the former does away with the cap on the commission of agents/intermediaries, the latter sets broader principals on how insurance can charge for expense of management.
Through the minutes of meeting, IRDAI has directed insurance companies to keep interests of both policyholders and agents/intermediaries in mind to arrive at the commission structure of their agents/intermediaries. It said, “The proposed regulations require insurers to have a board approved policy on payment of commission which inter alia takes into consideration interests of the policyholders and interest of the insurance agents and intermediaries and insurance intermediaries.”
Further, the insurance regulator has asked insurance companies to introduce direct plans in insurance by passing on the benefits to policyholders. It said, “The proposed regulations require insurers to have a board approved policy on the matters including, measures to bring cost effectiveness in the conduct of business, reduction of expenses of management and transfer benefits from reduction of expenses and/or from direct business to policyholders by way of reduction in premium.”
IRDAI has also identified three companies as domestic systematically important insurers - LIC India (Life insurance), The New India Assurance (Non-life insurance) and GIC Re (Reinsurer).
