Insurance agents should be in a position to earn at least Rs. 10,000 per month from selling insurance products, says TS Vijayan, Chairman, IRDA.
IRDA has asked insurance companies to adequately compensate distributors. In a recently held insurance summit organized by FICCI, IRDA Chairman, TS Vijayan said that insurance intermediaries should be in a position to earn at least Rs. 10,000 per month from selling insurance policies.
He said that the regulator has proposed to remove the cap from first year’s commission on life insurance policies. Removal of such cap will give insurers the freedom to decide the commission structure on their own, he added. He, however, said that insurers can pay higher commission from their shareholders account. Currently, insurance companies pay commissions from their premium amount.
In a relief to policyholders, Vijayan clarified that IRDA may put a cap on the overall expense ratio of insurance policies.
Also, the chairman urged government to start a ‘Jan Bima Yojana’ on the lines of ‘Jan Dhan Yojana’. He said that Jan Dhan Yojana has spread a lot awareness about banking and a similar drive can help increase the penetration of insurance.
He also said that insurers should come out with low cost insurance policies having annual premium of Rs. 2,000-3,000 for the masses.