Insurance Amendment Bill: High-commission intermediaries may see payout cut

The Insurance Amendment Bill empowers IRDAI to limit high commissions, reclaim unlawful gains, and strengthen oversight of intermediaries while opening new investment avenues for insurers

Insurance intermediaries who receive disproportionately high commissions are likely to see a decline in their payouts, post the new Insurance Amendment Bill, which gives the Insurance Regulatory and Development Authority of India (Irdai) power to disgorge unlawful gains made by insurers and intermediaries as well as the right to limit commissions paid to the intermediaries. However, use of the provision will depend on how regulations are formed around the same, industry experts said.

 

Intermediaries include bancassurance partners, OEM-linked partnerships, or similar high-volume channels.

 

Higher commissions sometimes compromise the welfare of the policyholder and companies might cut corners around claims. If