Home India Insurance Regulatory And Development Authority In exercise of the powers conferred by clause ic and jd of s...
Date: 27-Mar-2023 Category: Extra Ordinary State: Union Government Country: India

In exercise of the powers conferred by clause ic and jd of sub section 2 of section 114A, section 40 and section 31B of the Insurance Act,

Issued by Insurance Regulatory And Development Authority · Not Applicable

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Executive Summary & Key Takeaways

What it means

  • The gazette notification pertains to the Insurance Regulatory and Development Authority of India (Payment of Commission) Regulations, 2023.
  • These regulations define the rules and guidelines for the payment of commissions to insurance agents, intermediaries, and insurance intermediaries by insurance companies.
  • The regulations aim to promote market innovation, facilitate new business models, and provide insurers with flexibility in managing expenses to improve insurance penetration.

Key Changes

  • The Insurance Regulatory and Development Authority of India (Payment of Commission) Regulations, 2023 will come into force from April 1, 2023.
  • Insurers must have a written policy, approved by their Board, for the payment of commissions, which must be periodically reviewed.
  • The commission policy should consider the interests of policyholders, increase insurance penetration, the nature and tenure of policies, the interests and performance of agents/intermediaries, alignment with business strategy, cost efficiencies, and the relative importance of each factor.
  • The total commission payable for life insurance products (including health) cannot exceed the Expense of Management (EOM) limits specified under IRDAI (Expenses of Management of Insurers transacting Life insurance business) Regulations, 2023.
  • The total commission payable for general insurance products (including health) and health insurance products offered by standalone health insurers cannot exceed the EOM limits specified under IRDAI (Expenses of Management of Insurers transacting General or Health Insurance business) Regulations, 2023.
  • Insurers must submit Board-approved returns on commission payments to the Authority within 45 days of the end of each financial year. These returns must be reviewed by the Audit Committee before Board approval.
  • The Insurance Regulatory and Development Authority of India (Payment of Commission or Remuneration or Reward to Insurance Agents and Insurance intermediaries) Regulations, 2016 are repealed from the date the new regulations come into force.
  • The regulations will be reviewed once every three years from the date of notification, unless an earlier review, repeal, or amendment is warranted.

Impact Analysis

Insurers

  • Action Item: Review and update existing commission policies to comply with the new regulations. Develop processes for monitoring EOM limits and submitting returns to IRDAI.

Insurance Agents, Intermediaries, and Insurance Intermediaries

  • Action Item: Understand the new commission policies of the insurers they represent and adapt their business practices accordingly.

Policyholders

  • Action Item: Be aware of the commission structures and ask for clear explanations of how agents/intermediaries are compensated.

IRDAI

  • Action Item: Develop a framework for monitoring insurer compliance and providing guidance on the implementation of the regulations.

Key Entities Referenced

Insurance Regulatory and Development Authority of India (IRDAI): The regulatory body responsible for overseeing and regulating the insurance industry in India. Insurance Act, 1938: The primary legislation governing the insurance industry in India. Insurance Regulatory and Development Authority Act, 1999: The Act that established the IRDAI and defines its powers and functions. Insurance Advisory Committee: A committee that IRDAI consults with when making regulations. Insurance Regulatory and Development Authority of India (Expenses of Management of Insurers transacting Life insurance business) Regulations, 2023: Regulations specifying the limits for the management expenses of life insurance companies. Insurance Regulatory and Development Authority of India (Expenses of Management of Insurers transacting General or Health Insurance business) Regulations, 2023: Regulations specifying the limits for the management expenses of general and health insurance companies. Insurance Regulatory and Development Authority of India (Payment of Commission or Remuneration or Reward to Insurance Agents and Insurance intermediaries) Regulations, 2016: The regulations that are being repealed by the new regulations.
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रजिस्ट्री स.ं डी.एल.- 33004/99 REGD. No. D. L.-33004/99 सी.जी.-ए.पी.-अ.-27032023-244709 xxxGIDHxxx CG-AP-E-27032023-244709 xxxGIDExxx असाधारण EXTRAORDINARY भाग III—खण् ड 4 PART III—Section 4 प्राजधकार स ेप्रकाजित PUBLISHED BY AUTHORITY स.ं 198] िई कदल्ली, सोमिार, माच च27, 2023/चत्रै 6, 1945 No. 198] NEW DELHI, MONDAY, MARCH 27, 2023/CHAITRA 6, 1945 भारतीय बीमा जिजियामक और जिकास प्राजधकरण अजधसचू िा हदै राबाद, 26 माच,च 2023 भारतीय बीमा जिजियामक और जिकास प्राजधकरण (कमीिि का भगु ताि) जिजियम, 2023 फा. स.ं भाबीजिजिप्रा/जिजियम/2/190/2023.—बीमा अजधजियम, 1938 (1938 का 4) की धारा 114ए की उप-धारा 2 के खंड (आईसी) और (िडे ी), धारा 40 और धारा 31बी तथा बीमा जिजियामक और जिकास प्राजधकरण अजधजियम, 1999 (1999 का 41) की धारा 14 की उप-धारा (1) और उप-धारा (2) के खंड (ङ) एिं धारा 26 द्वारा प्रदत्त िजिय़ों का प्रयोग करते हुए, प्राजधकरण बीमा सलाहकार सजमजत के साथ परामिच करिे के बाद इसके द्वारा जिनलिजलजखत जिजियम बिाता ह,ै अथातच :् - 1. जिजियमों का सजं िप्त िाम और प्रारंभः (क) ये जिजियम भारतीय बीमा जिजियामक और जिकास प्राजधकरण (कमीिि का भुगताि) जिजियम, 2023 कहलाएँगे। (ख) ये जिजियम 1 अप्रैल 2023 से प्रिृत्त होंगे। (ग) इि जिजियमों की समीिा अजधसूचिा की तारीख से प्रत्येक तीि िर्च में एक बार की िाएगी, िब तक कक उि समीिा या जिरसि या संिोधि की आिश्यकता जिर्दष्टच अिजध से पहल े ि हो। 2017 GI/2023 (1)2 THE GAZETTE OF INDIA : EXTRAORDINARY [PART III—SEC.4] 2. उद्देश्यः इि जिजियमों के उद्देश्य ह ैं: (क) बािार ििोन्मेर्ण के प्रजत जिजियमि की अिुकियािीलता को बढािा। (ख) िये व्यिसाय माडलों, उत्पादों, कायचिीजतयों, आंतररक प्रकियाओं के जिकास में बीमाकताचओँ को सुजिधा देिा तथा जिजियामक उद्देश्यों की पूर्तच करते समय जिजियमों के सुगम अिुपालि में उन्ह ेंसमथ च बिािा। (ग) बीमा व्यापि में सुधार लािे के उद्देश्य के साथ संिृजि संबंधी बीमाकताचओं की आकांिाओँ और सतत-पररितचििील बीमा आिश्यकताओ ँके आधार पर उिके व्ययों का प्रबंध करिे के जलए उन्ह ेंलचीलापि प्रदाि करिा। 3. पररभार्ाएँ : (क) “अजधजियम” से समय-समय पर यथासंिोजधत बीमा अजधजियम, 1938 (1938 का 4) अजभप्रेत ह।ै (ख) “प्राजधकरण” से बीमा जिजियामक और जिकास प्राजधकरण अजधजियम, 1999 (1999 का 41) की धारा 3 के उपबंधों के अधीि स्ट्थाजपत भारतीय बीमा जिजियामक और जिकास प्राजधकरण अजभप्रेत ह।ै (ग) “कमीिि” से बीमा व्यिसाय की अपेिा करिे या प्राप्त करिे या लेिदिे करि े के जलए बीमाकताच द्वारा बीमा एिेंट, मध्यिती या बीमा मध्यिती को, िैसा लागू हो, अदा ककये गये पाररश्रजमक, प्रजतफल या चाह े ककसी भी िाम से कहलािेिाले भगु ताि सजहत कोई भी िजतपूर्त चअजभप्रेत ह।ै (घ) इि जिजियमों में प्रयिु और अपररभाजर्त, परन्तु समय-समय पर यथासंिोजधत अजधजियम, बीमा जिजियामक और जिकास प्राजधकरण अजधजियम, 1999 या उिके अधीि बिाय े गय े ककन्हीं भी जियमों या जिजियमों में पररभाजर्त िब्दों और अजभव्यजियों का अथ च िही होगा िो उि अजधजियमों, जियमों या जिजियमों में िमिः उिके जलए जिधाचररत ह।ै 4. कमीिि के भगु ताि के जलए बोडच द्वारा अिमु ोकदत िीजत (क) प्रत्येक बीमाकताच के पास कमीिि के भुगाताि के जलए एक जलजखत िीजत होगी, िो बीमाकताच के बोड च द्वारा अिुमोकदत होगी। (ख) बोडच द्वारा अिुमोकदत िीजत की आिजधक तौर पर समीिा की िाएगी। (ग) कमीिि के भगु ताि के जलए िीजत के उद्देश्य अन्य बातों के साथ-साथ जिनलिजलजखत पर जिचार करेंगेः (i) िह पाजलसीधारकों के जहत में ह;ै (ii) िह देि म ेंबीमा व्यापि और सघिता म ेंिृजि करती ह;ै (iii) बीमा पाजलसी का स्ट्िरूप और अिजध; (iv) बीमा एिेंटों, मध्यिर्तचयों या बीमा मध्यिर्तचयों का जहत; (v) िह बीमा एिेंटों, मध्यिर्तचयों या बीमा मध्यिर्तचयों के कायचजिष्पादि में िृजि करती ह;ै (vi) िह अपि े व्यिसाय की कायचिीजत के अिरूु प ह;ै (vii) व्यिसाय के संचालि म ेंऔर बीमा व्यिसाय के प्रबंध के सरलीकरण म ेंककफायत लाती है; तथा (viii) उपयुचि प्रत्येक जबन्द ुको कदये गये महत्ि के सापेि पररमाण पर संकेत देती ह।ै[भाग III—खण् ड 4] भारत का रािपत्र : असाधारण 3 5. बीमाकताओंच द्वारा बीमा एिटें ों, मध्यिर्तयच ों या बीमा मध्यिर्तयच ों को देय कमीिि (क) िीिि बीमाकताचओं द्वारा प्रस्ट्ताजित स्ट्िास्ट््य बीमा उत्पादों सजहत िीिि बीमा उत्पादों के अतं गतच देय कमीिि की कुल राजि समय-समय पर यथासंिोजधत भारतीय बीमा जिजियामक और जिकास प्राजधकरण (िीिि बीमा व्यिसाय करिेिाले बीमाकताचओं के प्रबंधि-व्यय) जिजियम, 2023 के अंतगचत जिजिर्दष्टच प्रबंधि के व्ययों (ईओएम) की सीमाओं से अजधक िहीं होगी। (ख) साधारण बीमाकताचओं द्वारा प्रस्ट्ताजित स्ट्िास्ट््य बीमा उत्पादों सजहत साधारण बीमा उत्पादों तथा स्ट्टैंडअलोि स्ट्िास्ट््य बीमाकताचओं द्वारा प्रस्ट्ताजित स्ट्िास्ट््य बीमा उत्पादों के अतं गतच देय कमीिि की कुल राजि समय-समय पर यथासंिोजधत भारतीय बीमा जिजियामक और जिकास प्राजधकरण (साधारण अथिा स्ट्िास्ट््य बीमा व्यिसाय करिेिाले बीमाकताचओं के प्रबंधि-व्यय) जिजियम, 2023 के अंतगचत जिजिर्दष्टच ईओएम सीमाओं से अजधक िहीं होगी। 6. बीमाकता चद्वारा कमीिि के भगु ताि के सबं धं म ेंजििरजणय़ों का प्रस्ट्ततु ीकरण (क) सभी बीमाकताच बीमा एिेंटों, मध्यिर्तचयों या बीमा मध्यिर्तचयों को बीमाकताच द्वारा कमीिि के भुगताि के संबंध म ें बोड च द्वारा अिुमोकदत जििरजणयाँ प्राजधकरण को प्रत्यके जित्तीय िर् च की समाजप्त स े 45 कदि के अदं र प्रस्ट्तुत करेंगे। (ख) ऐसी सूचिा और डेटा के जलए फामेट समय-समय पर प्राजधकरण द्वारा जिजिर्दष्टच ककये िा सकते ह।ैं (ग) इि जििरजणयों की समीिा बीमाकताच के बोडच के अिुमोदि के जलए प्रस्ट्तुत करिे से पहल े लेखा-परीिा सजमजत के द्वारा की िाएगी। 7. जिरसि और बचतः (1) भारतीय बीमा जिजियामक और जिकास प्राजधकरण (बीमा एिेंटों और बीमा मध्यिर्तचयों को कमीिि अथिा पाररश्रजमक अथिा प्रजतफल का भगु ताि) जिजियम, 2016 इि जिजियमों के प्रिृत्त होिे की तारीख से जिरस्ट्त ककये िाएँगे। (2) िब तक इि जिजियमों के द्वारा अन्यथा व्यिस्ट्था िहीं की िाती, उप-जिजियम (1) में उजल्लजखत जिजियमों के संबंध में ककये गय े ककसी कायच अथिा की गई अथिा ककये गये रूप में अथ च रखिेिाल े ककसी कायच अथिा ककसी कारचिाई के जिर्य म ें समझा िाएगा कक िह इि जिजियमों के तदिुरूपी उपबंधों के अतं गतच ककया गया ह ै अथिा की गई ह।ै 8. स्ट्पष्टीकरण आकद िारी करि े के जलए प्राजधकरण की िजिः इि जिजियमों के ककसी भी उपबंध को लागू करि े अथिा उसका अथचजिणचय करि े म ें ककसी भी करििाई को दरू करि े के जलए, प्राजधकरण का अध्यि स्ट्पष्टीकरण, जिदेि, और कदिाजिदिे िारी कर सकता ह।ै देबािीर् पण्डा, अध्यि [जिज्ञापि-III/4/असा./724/2022-23] INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY OF INDIA NOTIFICATION Hyderabad, the 26th March, 2023 Insurance Regulatory and Development Authority of India (Payment of Commission) Regulations, 2023 F. No. IRDAI/Reg/2/190/2023.—In exercise of the powers conferred by clause (ic) and (jd) of sub section 2 of section 114A, section 40 and section 31B of the Insurance Act, 1938 (4 of 1938), and sub-section (1) and clause (e) of sub section (2) of section 14 and section 26 of the Insurance Regulatory and Development Authority Act, 1999 (41 of 1999), the Authority in consultation with the Insurance Advisory Committee, hereby makes the following Regulations, namely: -4 THE GAZETTE OF INDIA : EXTRAORDINARY [PART III—SEC.4] 1. Short Title and Commencement of the Regulations: (a) These Regulations shall be called the Insurance Regulatory and Development Authority of India (Payment of Commission) Regulations, 2023. (b) These Regulations shall come into force from 1st April, 2023. (c) These Regulations shall be reviewed once in every three years from date of notification, unless the review or repeal or amendment is warranted earlier. 2. Objective: The objectives of these Regulations are: (a) To enhance responsiveness of the regulation to market innovation. (b) To facilitate the insurers in development of new business models, products, strategies, internal processes and enable in easy compliance with the Regulations while fulfilling the regulatory objectives. (c) To provide the insurers the flexibility to manage their expenses based on their growth aspirations and the ever-changing insurance needs with an objective to improve insurance penetration. 3. Definitions: (a) "Act" means the Insurance Act, 1938 (4 of 1938), as amended from time to time. (b) "Authority" means the Insurance Regulatory and Development Authority of India established under the provisions of Section 3 of the Insurance Regulatory and Development Authority Act, 1999 (41 of 1999). (c) “Commission” means any compensation including remuneration, or reward, by whatever name called, paid by an insurer to Insurance agent, Intermediary or Insurance intermediary, as applicable, for soliciting or procuring or transacting insurance business. (d) Words and expressions used and not defined in these Regulations but defined in the Act, as amended from time to time, the Insurance Regulatory and Development Authority Act, 1999 or in any of the rules or regulations made there under shall have the meaning respectively assigned to them in those Acts, rules or regulations. 4. Board approved policy for payment of Commission (a) Every insurer shall have a written policy for payment of commission, which shall be approved by the Board of the insurer. (b) The Board approved policy shall be reviewed periodically. (c) The objectives of the policy for payment of commission shall inter alia take into consideration the following: (i) it is in the interest of the policyholders; (ii) it increases insurance penetration and density in the country; (iii) the nature and tenure of the insurance policy; (iv) the interest of the Insurance agent, Intermediary or Insurance intermediary; (v) enhances the performance of the Insurance agent, Intermediary or Insurance intermediary; (vi) it is commensurate with its business strategy; (vii) brings cost efficiencies in the conduct of business and simplification of the administration of insurance business; and (viii) gives an indication on the relative degree of importance placed on each of the above. 5. Commission payable to Insurance agent, Intermediary or Insurance intermediary by insurers (a) The total amount of commission payable under life insurance products including health insurance products offered by life insurers shall not exceed the Expense of Management (EOM) limits specified under Insurance Regulatory and Development Authority of India (Expenses of Management of Insurers transacting Life insurance business) Regulations, 2023 as amended from time to time.[भाग III—खण् ड 4] भारत का रािपत्र : असाधारण 5 (b) The total amount of commission payable under general insurance products, including health insurance products offered by general insurers and health insurance products offered by standalone health insurers shall not exceed the EOM limits specified under Insurance Regulatory and Development Authority of India (Expenses of Management of Insurers transacting General or Health Insurance business) Regulations, 2023 as amended from time to time. 6. Submission of Returns on payment of Commission by the insurer (a) All insurers, within 45 days of the expiration of each financial year, shall submit to the Authority the Board approved returns on payment of commission by the insurer to the Insurance agent, Intermediary or Insurance intermediary (b) The formats for such information and data may be specified by the Authority from time to time. (c) These returns shall be reviewed by the Audit Committee prior to being placed for approval of the Board of the insurer. 7. Repeal and saving: (1) Insurance Regulatory and Development Authority of India (Payment of Commission or Remuneration or Reward to Insurance Agents and Insurance intermediaries) Regulations, 2016 shall be repealed from the date these Regulations come into force. (2) Unless otherwise provided by these Regulations, anything done, or any action taken or purported to have been done or taken in respect of the Regulations mentioned in sub-regulation (1) shall be deemed to have been done or taken under the corresponding provisions of these Regulations. 8. Power of the Authority to issue clarifications etc: To remove any difficulties in application or interpretation of any of the provisions of these Regulations, the Chairperson of the Authority may issue clarifications, directions, and guidelines. DEBASISH PANDA, Chairperson [ADVT.-III/4/Exty./724/2022-23] Uploaded by Dte. of Printing at Government of India Press, Ring Road, Mayapuri, New Delhi-110064 and Published by the Controller of Publications, Delhi-110054.

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