28/03/2023
Insurance Regulatory and Development Authority of India (IRDAI) has announced the removal of segmental limits on commissions for life, general, and health insurers. The move is expected to have a significant impact on the way insurance companies operate and compete in the market.
Under the new regulations, the total commission paid by life, general, and health insurers will have to be under the Expense of Management (EoM) limits. EoM is the sum total of commission and fixed expenses incurred by insurers. The move to remove segmental limits is expected to benefit insurers and web aggregators like Policybazaar, as it will allow them to allocate resources more effectively and optimize their commission structures.
Previously, different lines of insurance business had different commission limits, which made it difficult for insurers to operate in a unified manner. The removal of these limits is expected to promote a level playing field for all insurers and lead to increased competition in the market.
The regulator believes that the removal of segmental limits will benefit both consumers and insurers, as it will encourage insurers to provide better products and services at more competitive prices.
The new regulations have been welcomed by the insurance industry, with many experts stating that they will help to drive growth and innovation in the sector. Insurers are now expected to focus on developing new and innovative products that meet the changing needs of consumers, while also ensuring that their commission structures are competitive and sustainable in the long term.
Source : BFN
