“Currently, only long-term Motor Third Party (TP) premium is booked annually and commissions also paid annually. Otherwise, the entire premium for other long-term policies such as Fire policies for dwellings, Engineering policies for projects, Janata Personal Accident policies, etc. are booked upfront. Commissions are also paid upfront,’’ said a general manger of a PSU general insurance company.
Hyderabad: With effective from Oct 1 , insurance regulator IRDAI has asked the non-life insurers not to report long term premiums at one go and instead spread it over as many years on the basis of the tenure of the policies.
With effective October 1, 2024 the IRDAI has revised format of reporting premium figures and long-term premium have to be reported on basis of 1/N where N is numbers of days of the policy. Some companies have uploaded original figures as earlier and some companies have gone by new IRDAI format. So, numbers are not comparable in the premium chart for Oct, said the IRDAI on Monday.
Industry sources said one of the prime objectives of the new directives from the IRDAI is to bring in more transparency in commission payments to various intermediaries.
“Currently, only long-term Motor Third Party (TP) premium is booked annually and commissions also paid annually. Otherwise, the entire premium for other long-term policies such as Fire policies for dwellings, Engineering policies for projects, Janata Personal Accident policies, etc. are booked upfront. Commissions are also paid upfront,’’ said a general manger of a PSU general insurance company.
The IRDAI had implemented new Expense of Management (EoM) rules from FY24. The new norms permit insurers to pay commissions up to their EoM limits. The EoM limit is 30 per cent for general insurance and 35 per cent for Standalone Health Insurance.