General insurance cos can increase premiums by 5%

Coimbatore : The premiums you pay on non-life insurance policies could go up from April 1. The Insurance Regulatory Development Authority of India (IRDA) has allowed general insurance companies to increase or decrease premiums by 5% to comply with the new commission guidelines for insurance agents and intermediaries. In its new commission guidelines, IRDAI hiked the commission of most non-life policies to a maximum of 15% of the premium from the existing 10%. The IRDAI ( Payment of Commission or Remuneration or Reward to Insurance Agents and Insurance Intermediaries ) Regulations 2016 comes into force with effect from April 1. General insurers can also effect the increase or decrease in premiums from the same day. The regulator has fixed a maximum commission of 15% for individual health insurance policies, fire insurance policies for the retail segment and comprehensive motor insurance policies. " The regulations bring about certain revisions in commission / remuneration rates and also introduce the reward system. These may trigger insurers to revisit the pricing of their products in so far as the costing input relating to commission / remuneration is concerned," IRDAI stated in its latest circular. " In this backdrop, it has been decided that general insurers who wish to revise the pricing of their products as a result of the new regulations may do so without having to file a modification to the product under the ' Product Filing Guidelines, ' it said. " The change in premium rates however should be limited to 5% (increase or decrease) of the existing premium rates of products / add-ons," IRDAI stated. There should also be no change in any other parameter of the premium, it said. " In other words, the price change would be limited to the aspect of change in commission / remuneration including reward system, because of the new regulations," the insurance regulator stated. ( The Times of India, Madurai, Friday, March 24, 2017 ) Courtesy : MPS