breaking news Irdai releases revised consultation paper on management expenses and fees
The Insurance Regulatory and Development Authority (IRDAI) recently released a revised consultation paper on management and commission fees. According to this, the regulator has removed specific caps on commissions to agents and intermediaries that were previously proposed in August.
He has now suggested that commissions paid by insurance companies, life and non-life, should not exceed management fees.
The proposed cost management limit is 30% of gross premiums for life insurance companies and 35% of gross premiums for stand-alone health insurance companies.
This will come into effect from April 2023.
What will he do for these companies?
It will give great flexibility to insurers to plan their expenses. This will reduce compliance efforts and costs and also reduce the likelihood of tax disputes.
It will also help companies like PB Fintech where it significantly reduces regulatory risk for commission rates.