New measures to be effective from Apr 1

The IRDAI also approved licenses of two new life players-Acko Life Insurance and Credit Access Life Insurance

Hyderabad:

With a bit of delay, insurance regulator IRDAI had its last board meeting of the current fiscal, FY2022-23, on Saturday to decide about a few major issues including much awaited new Expense of Management(EoM) and removal of cap on the payment of commissions to insurance intermediaries, to be effective from Apr 1.

The details of these new regulations will be known after they get notified by the governnment shortly.

The last board meeting of the IRDAI was held in November 25,2022 and generally IRDAI board meets every quarter to take a few significant decisions.

The board meeting of the IRDAI was delayed as Parliament is in session since February 1.

Apart from EoM, the IRDAI approved two new life players Acko Life Insurance and Credit Access Life Insurance .

Earlier, Irdai had come out with a revised exposure draft on the EoM for the non-life insurance companies and had proposed a revised 30 per cent and 35 per cent caps on EoM in case of general insurers and standalone health insurers, respectively, after taking into consideration the insurance industry’s views.

The Irdai had also proposed to remove caps on payment of commission to insurance agents and intermediaries within the overall limit of new EoM.

For an insurance company, EoM includes operating expenses, commission to insurance agents and intermediaries and commission and expenses on reinsurance.

“The revised draft regulations emphasize on the board’s oversight through a board approved policy on the payment of commission whereby due consideration is to be placed on interest of the policyholders and the insurance agents and intermediaries and insurance intermediaries while also enhancing the performance of the insurance agents and intermediaries or insurance intermediaries,” the revised draft of IRDAI had said.

In the life insurance segment, under the revised draft, on deferred annuity policies, there is now a cap of 15 per cent of all first-year premiums and 6 per cent of all renewal premiums received during the year.

The additional allowable expenses within the overall expense cap now also include expenses incurred towards government schemes such as Pradhan Mantri Suraksha Bima Yojana, Pradhan Mantri Jan Arogya Yojana, Pradhan Mantri Fasal Bima Yoyaja as well as expenses up to five per cent incurred towards promoting insuretech and insurance awareness.