The Insurance Regulatory and Development Authority of India (Irdai) said on Friday it has not decided on a proposal for mandatory disclosure of commissions on policy documents.
“It has come to the notice of the authority that concerns are being expressed in some quarters regarding mandatory disclosure of commissions on the policy documents. The concerns emanate from certain recommendations made by working groups constituted by the insurance councils,” said the insurance regulator,
“It is hereby clarified that the Authority has not taken any decision on this matter,” Irdai said it regulator intends to hold discussions on the matter before a decision.
Committees on distribution and penetration had purportedly suggested that insurance companies should disclose the commissions they pay on each policy. Consequently, various distribution channels such as agents, online aggregators, corporate agents, and others would also have to disclose the commissions they are paid.
This stems from the fact that some insurance companies pay high commissions for the sale of insurance policies which invariably leads to miss-selling. The idea is to improve transparency in the system and build trust among consumers and also to reign in insurers that tend to pay higher commissions.