Introduction
The commission/remuneration and rewards payable to insurance agents and insurance intermediaries (such as insurance brokers, corporate agents, web aggregators and insurance marketing firms) for the solicitation and procurement of insurance business have historically been strictly regulated in terms of the amounts and manner of payment. In this regard, Indian insurance companies have always been restricted from paying any commission/remuneration or reward for each policy sold in excess of the amounts specified under applicable insurance laws.
There have been a number of representations made and recommendations shared over almost the past couple of decades for: (a) rewards to insurance agents and intermediaries to be introduced, and (b) the strict limits on commission/remuneration to be lifted or otherwise amended to give Insurance Companies flexibility in terms of the amounts payable. Certain reforms on commission structures were introduced over time, such as bonus for insurance agents and, later, rewards being introduced for insurance agents and insurance intermediaries on 15 April and 14 December 2016, respectively, where the capping on rewards was, broadly on the basis of the overall commission and remuneration paid to the respective eligible entities, rather than at a per-product level as otherwise applicable for commission and remuneration.
