IRDAI to maintain caps on broker commission

However, chairman T S Vijayan said he was ready to discuss the quantum of upper limit

Insurance Regulatory and Development Authority of India (IRDAI) chairman T S Vijayan today said the caps and commissions and remunerations being given to insurance brokers will remain. However, he said , the upper limit can be determined after taking the feedback from various stake holders.

His remarks came in response to a request being made by the insurance brokers for the removal of the same.

While addressing the 12th insurance brokers annual summit in the city, Vijayan said he was ready to discuss the quantum of cap as the draft regulations in this regard were released recently.

The draft regulation allowed up to about 15 per cent commission for insurance brokers with different rates for different segments. The final regulation is expected to be announced by next month.

A subcommittee was also formed for this purpose and the discussions are taking place to finalise these and other aspects of the regulation soon, according to Vijayan.

Speaking on the occasion the IRDAI chairman advised the brokers to adapt to the new business environment as the financial intermediation in the digital era will be a challenge for them.

Sanjay Kedia, president of Insurance Brokers Association of India (IBAI), has earlier requested the insurance regulator to liberalise commissions to allow market forces in determining these charges.

A report "Vision 2025: Brokers Driving Customer-Centric Growth", which was published by IBAI in association with Ernst & Young, was released by the IRDAI chairman on this occasion.

According to the report, the domestic insurance market is likely to expand while the gap between the economic and insured losses remain high.