rong>INTRODUCTION:
The Insurance Regulatory and Development Authority of India (Payment of Commission) Regulations, 2023 was brought into force on March 26, 2023, by the Authority in consultation with the Insurance Advisory Committee. This repealed the Insurance Regulatory and Development Authority of India (Payment of Commission or Remuneration or Reward to Insurance Agents and Insurance intermediaries) Regulations, 2016, and shall come into force from April 01, 2023.
OBJECTIVES:
IRDAI strives to enhance the responsiveness of the regulation to market innovation. Further, they want to facilitate the insurers in the development of new business models, products, strategies, and internal processes and enable easy compliance with the Regulations while fulfilling the regulatory objectives. The insurers are provided the flexibility to manage their expenses based on their growth aspirations and the ever-changing insurance needs with an objective to improve insurance penetration.
APPLICABILITY OF THE ACT:
The regulations extend to the whole of India.
AUTHORITY:
The Insurance Regulatory and Development Authority of India is responsible for the proper implementation of the regulation.
IMPORTANT PROVISIONS UNDER THE REGULATIONS:
Board-approved policy for payment of Commission - Every insurer shall have a written policy for payment of a commission, which shall be approved by the Board of the insurer.
Commission payable to the Insurance agent, Intermediary, or an Insurance intermediary by insurers –
The total amount of commission payable under life insurance products and general insurance products should not exceed the Expense of Management (EOM) limits specified.
Submission of Returns on payment of Commission by the insurer - All insurers, within 45 days of the expiration of each financial year, shall submit to the Authority the Board approved returns on payment of commission by the insurer to the Insurance agent, Intermediary, or Insurance intermediary
[Notification No. IRDAI/Reg/2/190/2023]
