ICICI Lombard General Insurance, Tata AIG General insurer, Star Health Insurance, niva Bupa Health Insurance, Aditya Birla Health Insurer and Care Health Insurer have already announced their decisions to reduce commission
All the general insurers and stand health insurers had a virtual meeting, organised by the General Insurance Council, on Monday to discuss whether all the players should cut down down their commission to the agents and brokers. However, no consensus could be arrived at on the issue
Mumbai: After passing on the full benefits of removal of 18 per cent GST(goods and services tax) to their retail health insurance customers since Sept 22, many general insurers and health insurers particularly from the private sector have decided to reduce their commission to brokers, agents, bancassurance partners by as much from Oct 1 to compensate their losses in the absence of input tax credit(ITC) on such premium.
Some of the insurers who have already announced their decision to reduce their commission for their are distribution partners, ICICI Lombard General Insurance, the second largest non-life insurer in the country, Tata AIG General Insurance, Star Health Insurance, niva Bupa Health Insurance, Aditya Birla Health Insurer and Care Health Insurer.
Normally, the insurers offer 15 per cent commission to their distribution partners which will be reduced by 18 per cent from Oct 1. For instance, if the commission received for a particular sale is Rs 100, the same will be slashed by by 18 per cent and Rs. 84.74 shall be payable effective Oct 1, 2025, said all these insurers.
Other insurers except the PSU general insurers are expected to follow suit soon.
The move by private sector general insurers and health insurers to reduce commission will now provide advantages to PSU general insurers as distribution partners will prefer to deal with them to receive higher commission, said market analysts.
In fact all the general insurers and stand health insurers had a virtual meeting, organised by the General Insurance Council, on Monday to discuss the issue whether all the players should cut down their commission to their distribution partners.
However, no consensus could be arrived at on the issue. While some insurers opine that insurers are free to adjust their commission under the permissible expenses of management (EoM), others had suggested a consensus the in the industry on the issue.
Meanwhile, ICICI Lombard General Insurance in a communication to its distribution partners said,“Insurers are now required to pass on the entire GST benefit to customers, however, they can no longer claim ITC on expenses including commissions, administrative and operational expenses impacting margins. To ensure a fair balance between the interests of customers, distribution partners, and ICICI Lombard, we will absorb the impact of ITC on non-commission related expenses, However the commission structure for GST-exempt policies will be revised by reducing it by 18 per cent,’’ said ICICI Lombard General Insurance in a communication to distribution partners.
Tata AIG General Insurance said , “with the new guidelines in place, insurance companies are no longer eligible to claim ITC. This will lead to an increase in costs impacting P&L and EOM of insurance companies. Starting 1st October 2025, commission rates will be revised to align with the GST changes. We will be rolling out the updated commission grids shortly”,
Care Health Insurance said,“ for Health and General Insurance companies there are many components like rent, technology and contractual manpower for which GST has to be applied. We will absorb the impact of GST on all these expenses, however we are constraint the impact of GST on commission will be passed on to the distribution partners,’’
Aditya Birla Health Insurance (ABHI) also issued a similar notice stating that starting October 1, 2025, the GST cost will have to be borne by distributors.
The stand alone health insurer said that with GST exempt on individual health and life insurance policies, “the input tax credit (ITC) will no longer be available on Commission, Rewards & Equivalent and other corporate expenses and going forward, GST will now be a cost for health insurers.
“This will have a major impact on the finances of the Health Insurance companies, wherein the GST will now be a cost, and this would impact the profitability and EOM of the insurers”, said ABHI .
ABHI proposed that the “commission, rewards and equivalents payable on the business done by the distribution partners shall be inclusive of GST w.e.f October 1, 2025.”
This means that effective October 1, 2025, the GST on commissions, rewards and equivalents on all fresh and renewal business shall be borne by the distributors, said ABHI.
Nice article
My question is why everything goes on head of Agent/distributors? Management can not bear a small amount? I am in this field since 1979 till now so much expenses are increased in every thing but commission rate not increased.
I have been insured with Niva Bupa since 2021. But inspite of having remitted a hefty premium very promptly ever since, I was mercilessly denied cashless surgery for my cataract surgery in June. That too without specific reason for refusal. My repeated requests were turned down.
Approch Insurance ombudsman you will get claim settled
Please reduce salary of all mangagers& incentives also. Because advisors give more service ( 24 hrs )to customer than any sales person of all insurance companies.
Agents/ Advisors are feet on street getting business for insurance companies.
It is grossly unfair to cut commissions. There are establishment costs, salaries, etc which are paid to advisors teams.
I have agency with care health insurance since January 2024
It is very wrong statment of GST department which saying about 18 percent deduction is maintaining with intermiedy agents or borokers code.
With sales increasing due to GST cut, Why the company can’t bear a little profit fall, maybe distributors must stop pushing insurance products and let the sales of the companies take a downfall.
Half baked agents, bullying health insurers and filthy over charging hospitals and hopeless grey areas of IRDA guidelines – these are big Nexus.
Why the distributors bear the brunt? The cut should be on the management expenses.What is role of General Insurance Council?
Base commission should be as per IRDAI norms, the incentive payout part should be reduced on higher slabs to adjust against any losses occurred due to 0 GST.
Complaint Letter
To,
Mr./Ms. Chairperson,
IRDAI (Insurance Regulatory and Development Authority of India)
Hyderabad
Subject: Complaint regarding unfair commission deductions and discrimination against advisors.
Sir/Madam,
I am respectfully requested to announce that I am an Insurance Advisor/Agent for your company. I have helped the company reach its customers, built trust, and contributed to its market growth through years of hard work.
This decision is unfair to us, as advisors have played a crucial role in building the company’s growth and strength. Without advisors, the company would not have been able to reach its customers so easily.
So, my humble request is:
1. The company’s commission cuts should be reconsidered.
2. The rights and interests of advisors should be protected
3. IRDAI should intervene and conduct an impartial investigation into this matter.
If appropriate action is not taken, we will have to consider other legal options to protect our rights.
Sincerely,
pardeep kumar
20059007
[mobile number 9818238804
[Pradeepgoyal33@gmail.com
IN Hindi
शिकायत पत्र (Complaint Letter)
सेवा में,
अध्यक्ष महोदय/महिला,
IRDAI (Insurance Regulatory and Development Authority of India)
हैदराबाद
विषय: कमीशन में अनुचित कटौती एवं एडवाइज़र्स के साथ भेदभाव संबंधी शिकायत।
महोदय/महोदया,
सविनय निवेदन है कि मैं आपकी कंपनी का एक बीमा सलाहकार (Insurance Advisor/Agent) हूँ। मैंने कंपनी को ग्राहकों तक पहुँचाया, लोगों का विश्वास बनाया और वर्षों तक मेहनत करके कंपनी को बाज़ार में स्थापित करने में अपना योगदान दिया है।
परंतु हाल ही में कंपनी ने एडवाइज़र्स का कमीशन 18% तक कम कर दिया है। इस निर्णय से न केवल हमारी आजीविका पर गहरा असर पड़ा है, बल्कि यह भी प्रतीत होता है कि कंपनी धीरे-धीरे एडवाइज़र्स को समाप्त करना चाहती है।
यह निर्णय हमारे साथ अन्यायपूर्ण है, क्योंकि कंपनी को बड़ा और मज़बूत बनाने में सबसे महत्वपूर्ण भूमिका एडवाइज़र्स की ही रही है। बिना एडवाइज़र के कंपनी ग्राहकों तक इतनी आसानी से नहीं पहुँच सकती थी।
अतः मेरा विनम्र निवेदन है कि:
1. कंपनी द्वारा की गई कमीशन कटौती पर पुनर्विचार किया जाए।
2. एडवाइज़र्स के अधिकारों और हितों की रक्षा की जाए।
3. IRDAI इस विषय में हस्तक्षेप करके निष्पक्ष जाँच करे।
यदि उचित कार्रवाई नहीं की गई तो हमें अपने अधिकारों की रक्षा हेतु अन्य कानूनी विकल्पों पर विचार करना पड़ेगा।
भवदीय,
Pardeep kumar
20059007
[मोबाइल नं 9818238804
[Pradeepgoyal33@gmail.com
To,
Hon’ble Chairman, Sir/Madam,
Insurance Regulatory and Development Authority of India (IRDAI),
Hyderabad
Subject: Complaint Regarding Unfair Commission Reductions and Discriminatory Treatment of Insurance Advisors
Respected Sir/Madam,
I respectfully request that I am a dedicated insurance advisor with an esteemed company.
Over the years, I have earned the company’s customers’ trust through tireless work, dedication, and trust. My efforts have significantly contributed to strengthening the company’s reach and reputation.
However, recently the company has made an unfair and unilateral reduction of 18% in the commission of insurance advisors.This decision has not only dealt a severe blow to our livelihoods, but also indicates that the company may be moving towards eliminating the role of consultants.
This move is a grave injustice to us, as the contribution of our consultants has been paramount in the growth of the company and its establishment in the market.
Without the dedication and hard work of our consultants, the company’s reach to its customers would not be as smooth.
Therefore, I would like to humbly draw your attention to the following demands:
1. The unjustified commission reductions should be immediately reconsidered.
2. Concrete steps should be taken to protect the rights and interests of insurance advisors.
3. IRDAI should intervene in this matter and ensure a fair and transparent investigation.
If prompt and appropriate action is not taken in this regard, we may have to resort to other legal and statutory remedies to protect our rights.
You are kindly requested to take this complaint seriously and take appropriate action as soon as possible.
Thank you,
Sincerely,
Ajay Mishra
In Hindi
सेवा में,
माननीय अध्यक्ष महोदय/महोदया,
भारतीय बीमा विनियामक और विकास प्राधिकरण (IRDAI),
हैदराबाद
विषय: कमीशन में अनुचित कटौती एवं बीमा सलाहकारों के प्रति भेदभावपूर्ण व्यवहार संबंधी शिकायत
मान्यवर/मान्यवरी,
सविनय निवेदन है कि मैं आपकी प्रतिष्ठित कंपनी का एक समर्पित बीमा सलाहकार हूँ। विगत कई वर्षों से मैंने अथक परिश्रम, निष्ठा और विश्वास के साथ कंपनी के लिए ग्राहकों का विश्वास अर्जित किया है। मेरे प्रयासों से कंपनी की पहुँच और प्रतिष्ठा को सुदृढ़ करने में महत्वपूर्ण योगदान रहा है।
किंतु, हाल ही में कंपनी द्वारा बीमा सलाहकारों के कमीशन में 18% की अनुचित और एकपक्षीय कटौती की गई है। इस निर्णय ने न केवल हमारी आजीविका पर गहरा आघात पहुँचाया है, बल्कि यह भी संकेत देता है कि कंपनी शायद सलाहकारों की भूमिका को समाप्त करने की दिशा में अग्रसर है। यह कदम हमारे साथ घोर अन्याय है, क्योंकि कंपनी की प्रगति और बाज़ार में उसकी स्थापना में सलाहकारों का योगदान सर्वोपरि रहा है। बिना सलाहकारों के समर्पण और मेहनत के, कंपनी का ग्राहकों तक पहुँचना इतना सहज नहीं होता।
अतः, मैं नम्रतापूर्वक निम्नलिखित माँगों के साथ आपका ध्यान आकर्षित करना चाहता हूँ:
1. कमीशन में की गई अनुचित कटौती पर तत्काल पुनर्विचार किया जाए।
2. बीमा सलाहकारों के अधिकारों और हितों की रक्षा हेतु ठोस कदम उठाए जाएँ।
3. IRDAI इस मामले में हस्तक्षेप कर निष्पक्ष और पारदर्शी जाँच सुनिश्चित करे।
यदि इस दिशा में शीघ्र और उचित कार्रवाई नहीं की गई, तो हमें अपने अधिकारों की रक्षा के लिए अन्य कानूनी और वैधानिक उपायों का सहारा लेना पड़ सकता है।
आपसे विनम्र अनुरोध है कि इस शिकायत को गंभीरता से लेते हुए यथाशीघ्र उचित कदम उठाएँ।
सधन्यवाद,
भवदीय,
अजय मिश्रा
I have taken Star Health Insurance Company agency since 2021. Business comes only through insurance agents, if you cut their commission then you will not get business.
In Hindi
मै 2021 से स्टार health इन्शुरन्स कंपनी agency लिया हूं | इन्शुरन्स एजन्ट के द्वारा ही business आता है, अगर उनका ही कमिशन काट दोगे तो business नही मिलेगा..
To IRDAI – Chairman,
To Insurance Company – CEO,
To Finance Minister,
With deep pain & sorrow with concern for the Citizens of Bharat – working as Insurance Advisor for Various Companies are forwarding our Stand to Rollback the GST on Commission Income to Insurance Advisors.
We regret to inform you that time & again the Insurance Advisors are being made to suffer. Unlike Farmers we Advisors have no other Option but to Commit Suicide.
The Insurance Companies illogically have sent Notifications for charging GST of 18% to our Commission Income in addition to Income Tax. Further the Insurance Industry as the direct discretion of Govt. & IRDAI have already reduced the Commission Rates. Additionally the Insurance Company Repudiates the Commission for the Agency whose Claims are more.
Now would you please make us understand how advisors are Responsible for the Claims which are not even in your Control.
The Fact is Premiums are high due to Insurance Companies Policies Benefits, Overcharging of Hospitals, Claim Ratio of Insurance Companies, Business Payouts to Corporate Brokers & Banca Channels.
Why are we Individual Advisors put to Death Grave like Farmers? In the History of Commission Rates we have never seen Upwards Payout Rates. So why Downward Payouts with Additional burden of Taxes. What if PAN India Advisors Stop Doing Insurance Business for a Month will the Economy Boom.
The Policy makers should rethink and ask the Insurance Companies & Regulators to Rollback the Decision of Charging GST on Insurance Commission. We are not against the Growth of the Economy, However this decision will result into many Small Advisors to Quit the Industry and be Unemployed.
Regards,
Insurance Advisor – Backbone of the Insurance Industry.
Companies give lucrative travel packages to their employees and all aggregator….. When GST was there no one have increased agent commission but the moment anything hit companies immediately target on agent commission….. Are they reducing their staff salary????? Are they reducing their office expenses cost ????? Are they reducing in the marketing and branding cost???? But yes agents are always in target 🎯