The Insurance Advisory Committee will meet on Monday to finalise the commission structure. The recommendations of the advisory committee will be send to the board of the Insurance Regulatory and Development Authority of India (Irdai) which will take its final decision in its meeting scheduled for October 24.
Apart from the commission structure, Irdai is also keen on taking a decision with regard to providing second stage of licence (R2) to global re-insurers in the board meeting.
During the Assocham 9th Global Insurance Summit in Mumbai, Irdai chairman TS Vijayan had said, “There are five-six players that has approached Irdai and I think by January 2017 some of them will start coming in. I think R2 will be given in the next Irdai board meeting and they (foreign reinsurers) have to bring in capital to start working.”
As of now, state-owned GIC Re is the only re-insurer which is fully operational. There are three levels of licences to be issued by Irdai to foreign re-insurers to start their operations. They have received R1 licence and now are waiting for R2 and R3.
Senior officials in the Irdai said coming out with the new commission structures will be a major regulation after passage of the Insurance Law (Amendment) Act 2015. “I think most of the new laws are in place and while finalising the commission structure we have kept in mind concerns of the industry and it will be very balanced structure,” said a member from Irdai.
The insurance industry has been recommending decent structure for the intermediaries or agents.
Consequent upon promulgation of lnsurance Laws (Amendment) Act, 2015, amendments to the provisions of the Insurance Act, 1938 and the Insurance Regulatory and Development Authority Act, 1999 were effected.
The insurance industry has been urging the regulator to allow them to specify the commission ceiling instead of specific commission rates in the ‘file and use’ documents.