From this financial year, your insurance agent is eligible to get a higher payout for selling you a policy, but did you know that this may increase your premium as well? Last month, the Insurance Regulatory and Development Authority of India (Irdai) in a series of circulars (You can read them here: bit.ly/2o4lMUO, here: bit.ly/2oHzlNp, and here: bit.ly/2oIwLqd) has allowed life and non-life companies to increase their premium from April.
The regulator feels that the new regulations may trigger insurers to revisit the pricing. To accommodate that, it has allowed insurers to adjust premiums by up to 5% without having to re-file the product. “In order to provide them relief from filing products on account of new regulations on commissions, we have advised them that if the change in premium rate is going to be plus minus 5%, the insurer can simply inform Irdai,” said Nilesh Sathe, member life, Irdai. In the case of non-life products, the hike in premium would be applicable on renewal as well, as these are typically annual contracts, but insurers again needn’t re-file for adjustments up to 5%. “So if an insurer needs to revise the premiums on account of extra pay-outs, the regulator has made it operationally easy.They just need to give a certificate to the regulator stating clearly that the hike is only due to the increase in payouts,” said Antony Jacob, chief executive officer, Apollo Munich Health Insurance Co. Ltd. Does this mean you pay a higher premium? Perhaps not immediately, and not much.
