IRDAI Proposes Insurance Commission Caps; Banks Rethink Products
Why in the news
The insurance regulator suggested tighter limits on what distributors can earn, which could change what banks push to customers.
Key facts
- Regulator: IRDAI.
- Proposal: lower Expense of Management (EoM) limits plus commission caps by product and channel.
- Structure: separate limits for individual and corporate distributors; individuals get higher limits.
Proposed caps for individual distributors
| Product | Cap |
|---|---|
| Term insurance | 30% |
| Health insurance | 20% |
Impact
- Banks may rethink the insurance products offered at their branches.
Exam angle
- Regulator behind the proposal: IRDAI.
- Term to know: Expense of Management (EoM).
- Figures: 30% term, 20% health for individual distributors.