No Decision on Mandatory Disclosure of Insurance Policy Commissions: IRDAI
The Insurance Regulatory and Development Authority of India (IRDAI) on Friday said it has not taken any decision on disclosing the commission paid to insurance intermediaries on the policy document.
In a statement, IRDAI clarified that it has not taken any decision on this matter.
Furthermore, the IRDAI will hold extensive consultations with all stakeholders before any such decision is taken.
Insurance intermediaries like agents and brokers voiced their views against the proposal to make it mandatory to specify the amount of commission paid on the policy document.
"The concerns emanate from certain recommendations made by Working Groups constituted by the Insurance Councils," IRDAI said.
Disclosure of commissions on the policy document will result in clients demanding a share of the agents/brokers income. It should also be noted the rebate of premium is prohibited by the insurance law, a broker not wanting to be quoted told IANS.
According to the broker, nearly 65 per cent of corporate insurance for the non-life sector is procured by the brokers and such a disclosure will result in clients or their employees asking for a cut in the brokerage.
"The insurance brokers have their establishment costs which are met out of the commission on the policies procured by them," the broker said.
If transparency is to be there, then the sectoral regulator can mandate the insurers to disclose the amount of commissions and other amounts paid to the motor vehicle dealers while procuring insurance policies from them.
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