Life insurers cut agents' slice to give customers the full GST pie

Commission payouts reduced by 18% as insurers pass GST cut benefits to customers

To ensure that the entire benefit of the goods and services tax (GST) exemption on insurance policies purchased by individuals is passed on to consumers without any change in product pricing, life insurers will reduce distributor commissions on new policies as well as renewals, they have conveyed to the Insurance Regulatory and Development Authority of India (Irdai).

 

According to the decision communicated to the regulator through the Life Insurance Council, companies will offset the impact of the removal of input tax credit (ITC) due to the zero GST levy on insurance premiums, by slashing distributor commissions to the extent of