IRDA
wants to enable insurers to fix agency commission
Insurance sector
regulator IRDA suggested to the parliamentary panel looking into
the Insurance Bill today, to incorporate a provision to give a free hand to
insurers to fix the agency commission, which is currently capped at 40 per cent
of the first-year premium.
At a meeting held with
MPs chairing the select house panel on the Insurance Law (Amendment) Bill
today, IRDA Chairman T
S Vijayan endorsed the regulator's internal panel's recommendation to
abdicate its powers to fix agency commission, because it felt that insurers
should be free to give agents better commissions to help deepen insurance
penetration, said an IRDA member who attended the meeting.
The meeting was
chaired by BJP member Chandan
Mitra, who is the chairman of the select house panel, here today.
The house panel is
likely to submit its report before the winter session which begins on November
24 and the finance ministry is hopeful tabling the Bill during the
session.
The government had
tried to table the Bill in the monsoon and budget sessions in June and July,
but could not do to due to opposition from the Congress.
Currently, the law
does not allow insurers to pay more than 40 per cent of the first-year premium
to agents as commission.
Sources said that the
IRDA is of the view that a flexible commission framework would make agents more
productive and help deepen insurance penetration, which is only 3.2 per cent at
present.
Agents have been
quitting insurance companies due to a lack of major incentive to them and their
number shrank to 21.5 lakh as on September 30 from 21.9 lakh as on 31 March
this year, as per industry sources.
Source:-The Economic
Times
