50 per cent persistency ratio is compulsory for an agent in case of change of insurance agency from one life insurer to another
IRDA eases certain norms for insurance agents by removing certain riders and nailing the persistency ratio which refers to retention of clients at 50 per cent.
In February, IRDA had pegged the persistency ratio, a measure of customer satisfaction at 50% with a rider that it should go up to 75% by 2015-16. "The average persistency rate is uniformly set as 50% which is to be reckoned only on number of policies," said IRDA circular.
According to the circular, in case of a transfer of insurance agency from one life insurer to another, the agent should mandatorily have a persistency ratio of 50 percent.
The circular also clarified that policies which continue to provide insurance cover to clients after the end of premium payment (auto cover policies) would be included while computing the persistency ratio.However, it added, the policies, which have already matured or wherein death or surrender has happened, would be exempted from calculating persistency ratio for the agent.
IRDA also redefined the definition of relative. Earlier, according to the regulator, relatives included spouse, sisters, brothers, parents, sons, daughters-in-law, daughters and sons-in-law. But now ‘dependent children or dependent step children whether residing with the employee or not’ also falls under relatives definition.