Commission payments to insurance agents and insurance intermediaries for distribution and servicing of insurance policies, as well as the overall expenditure of an Insurer vis-à-vis the premium earned by it in any particular financial year, has been historically subject to stringent limits in terms of the manner and timing of such payments/expenditure.
For several years now, various representations have been made to the regulator to consider some relaxations on the expenses of management (“EOM”) that may be incurred by Insurers and to
remove the strict payment caps for commission payments. Following the more recent discussions and representations, on 23 November 2022, the IRDAI issued exposure drafts re (i) payment of
commissions to insurance agents/insurance intermediaries; (ii) expenses of management of Insurers transacting life and non-life insurance business.
