Starting from the new financial year 2017, car, motorcycle and health insurance prices are expected to rise after Insurance Regulatory and Development Authority (IRDA) has given a green signal to insurers for a commission revision for agents.
The Insurance Regulatory and Development Authority of India (IRDAI) is an autonomous, statutory agency tasked with regulating and promoting the insurance and re-insurance industries in India. It was constituted by the Insurance Regulatory and Development Authority Act, 1999 ,an act of Parliament passed by the Government of India.
The change in premium will be subject to a +/- 5 per cent of the existing rates.
Additionally, third party motor insurers have also hiked premium rates which will come into affect along with the IRDAI(Payment of Commission or Remuneration or Reward to Insurance Remuneration or Reward to Insurance Agents and Insurance Intermediaries) Regulations, 2016 comes into effect from April 1, 2017.
Not only do these regulations bring about revised commission/remuneration rates, they will also introduce a new reward system that will be put in place, said IRDAI.
This system will allow insurers to relook the product prices they are currently offering and input prices related to commission/remuneration, added the regulator.
However, IRDAI stated that the premium rates change should only be limited to +/- 5 per cent change of the existing rates of the products and add-ons offered.
Further, insurers will have to give a certificate that there is “no detrimental change” in premium rates or any other provision of policies already sold.