No decision on mandatory disclosure of insurance policies Commissions: IRDAI
The Insurance Regulatory and Development Authority of India (IRDAI) said on Friday that it had not taken any decision on the disclosure of the commission paid to insurance intermediaries on the policy document.
In a press release, the IRDAI specifies that it has not taken any decision on this subject.
In addition, IRDAI will hold extensive consultations with all stakeholders before any such decision is made.
Insurance intermediaries such as agents and brokers have spoken out against the proposal to make it mandatory to mention the amount of commission paid on the policy document.
“The concerns stem from certain recommendations made by working groups set up by insurance boards,” IRDAI said.
Disclosure of commissions on the policy document will result in clients demanding a revenue share from agents/brokers. It should also be noted that premium refunds are prohibited by insurance law, a broker not wishing to be listed told IANS.
According to the broker, nearly 65 percent of business insurance for the non-life sector is purchased by brokers and such disclosure will result in clients or their employees requesting a reduction in the brokerage.
“Insurance brokers have their set-up costs which are covered by the commission on the policies they have written,” the broker said.
If transparency is to be there, then the industry regulator can compel insurers to disclose the amount of commissions and other amounts paid to car dealers when they purchase insurance policies from them.
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