Bhagwat Karad, minister of state, ministry of finance
IRDAI has informed that they have not received any complaint raising the issue of difficulties faced by individual agents of public general insurance due to cut and pay system of some private insurers who offer third party premiums below the tariff but printing the tariff rates in policy, said Bhagwat Karad minister of state, ministry of finance
New Delhi:
The issue of “display of commission rate on the insurance policy document’ which is being strongly resisted by the insurance agents and brokers, has now hit the parliament with the Congres party’s member of parliament from Ernakulam, Hibi Eden raising the issue in the Lok Sabha on Monday.
To a Eden’s question “Whether the Government has analysed or speculated the impact of Insurance Regulatory and Development Authority of India (IRDAI) proposal in which a provision has been made to print the commission on the policy document or certificate and if so, the details thereof including the current status,’’ Bhagwat Karad, minister of state, ministry of finance, said that the insurance regulator IRDAI has already clarified that they have not taken any decision with regard to disclosure of commission on the policy document.
The issue pertains to a development where a committee under Ritesh Kumar, MD & CEO,HDFC Ergo General Insurance, constituted by General Insurance Council, the official representative body of Indian general insurance industry, had recommended that commission paid to insurance agents and brokers be displayed on the policy document to bring in an element of transparency on the costs of the insurance products.
However, the move has been staunchly opposed by the agents and brokers as they fear the customers after knowing the commission rate may ask it to be shared with him or her.
Responding to Hibi’s another question, “Whether the Government is aware of the difficulties faced by individual agents of public general insurance due to cut and pay system of some private insurers who offer third party premiums below the tariff but printing the tariff rates in policy and if so,” Karad replied that IRDAI has informed that they have not received any complaint raising the issue of difficulties faced by individual agents of public general insurance due to cut and pay system of some private insurers who offer third party premiums below the tariff but printing the tariff rates in policy.
Karad also informed that the general insurance industry had 14,22 lakh agents till March 21 which has grown from 9.91 lakh in March 2019.
Karad has further clarified that the government has no role in determining the commissions to insurance agents.
“Commissions are paid to them by insurers as per IRDAI (Payment of Commission or Remuneration or Reward to Insurance Agents and Insurance Intermediaries), Regulations, 2016,’’ he replied to a Hibi’s question “whether Government has any plans to increase payouts given to agents considering the increase in cost of living.”