IRDAI Questions 23 Insurers Over Expense and Commission Limits
Why in the news
The insurance regulator questioned 23 companies for crossing expenses-of-management limits, chiefly through commissions, and is reviewing replies before deciding any penalty.
Key facts
- Law used: IRDAI (Expenses of Management, including Commission, of Insurers) Regulations, 2024.
- Queried: 8 life insurers and 15 non-life insurers.
- Penalties: case by case after due process.
About the 2024 EoM Regulations
A flexible system that replaces rigid product-wise caps with one overall EoM ratio, covering commission and distribution costs.
- Objectives: efficiency and cost discipline, pricing and distribution flexibility, policyholder protection and transparency, wider penetration and inclusion.
- EoM covers: agent or intermediary pay, marketing and distribution, operating and admin costs.
- Ceilings: separate overall limits for life, general, health and reinsurers, tied to gross premium written and business mix.
- Commission: insurers choose structures freely, with no product-wise or channel-wise caps, inside the ceiling and a Board-approved expense policy.
- Governance: mandatory Board policy on reasonable expenses, fair treatment and sustainability.
- Oversight: more public disclosure; annual certification by Appointed Actuary and CEO/CFO; IRDAI may intervene on persistent breach or mis-selling.
Exam angle
- Insurers queried: 23.
- Regulation year: 2024.
- Key idea: overall EoM ceiling, not product-wise caps.