Insurance Regulatory and Development Authority

The question of payment of agency commission in respect of business governed by regulations made by Tariff Advisory Committee has been engaging the attention of the Authority for sometime. The matter has been discussed with general insurers both collectively and individually. The views of the insurers have been taken into account. After evaluating the responses received from the insurers and in terms of section 34(1) of the Insurance Act, 1938 read with section 14 of the IRDA Act, 1999, the Authority prescribes the following limits for payment of agency commission in respect of the above mentioned business

Discount: In all cases where agency commission is not paid, a discount of 5% of the premium can be allowed and indicated as such in the policy documents.

The above direction will come into effect from 1^st April, 2002. Any breach of these directions would be viewed severely by the Authority and would be the subject matter of action which may be initiated by the Authority under section 102 of the Insurance Act, 1938.