Online platforms such as Policybazaar, as well as corporate agents, may have to disclose the commissions they receive from insurance companies for selling their policies.
The move is aimed at pushing transparency and customer protection. It would also put an end to misselling of products that have high commission or rewards.
Web aggregators may have to come up with a specific section for ‘insurance policyholder protection.’
They will have to disclose the commission rates and rewards that they are entitled to receive from insurance companies for selling their products. Reporting of commissions may also be made mandatory for corporate agents and brokers.
The IRDAI is considering a proposal that seeks to have a single limit for expenses made by insurance companies. These will include operating expenses, commissions and rewards given by insurers.
Under the current practive, there is a separate limit for expenses allowed at the business level and for operations, commissions and rewards. The proposal is to ensure appropriate market conduct and expense management by insurance companies.
Insurers may also have to disclose commission for every policy along with the name of the intermediary.
