This week, when the insurance regulator, Insurance Regulatory and Development Authority of India (Irdai), offered freedom to companies to set the rules for the payment of commission to agents, the stocks of most listed insurance companies rose.
Irdai Chairman Debasish Panda has notified that all insurance companies can now decide the commission rates they will pay an agent, for securing any type of business. Earlier, the regulator had placed a limit on different commission payments within an overall board-approved cap on expenses.
The liberalised rules mean that insurers could get more flexibility to synchronise their business goals and expenses. This could mean that an agent that brings in small ticket-size but large volume business, such as third-party motor insurance, could