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IRDA forms expert panel to review remuneration model

C.R. Sukumar

Hyderabad , Sept. 3

RESPONDING to the concerns being expressed by various sections of the insurance market on the withdrawal of five per cent discount to the intermediaries, the Insurance Regulatory and Development Authority (IRDA) has decided to constitute an expert committee to examine the remuneration structure of insurance brokers, agents and other intermediaries in general insurance business.

In a communiqué circulated to all the parties concerned on Monday, the IRDA Chairman, Mr C.S. Rao, said the regulator had examined the representations and concerns shown on the issue and decided to keep the said notification under abeyance with immediate effect and accordingly issued orders to that effect on July 16.

However, since the subject in question relates not only to special discount, agency commission, brokers' remuneration, differential rates/scales of procurement of insurance business and rebates, but to wider range of issues, IRDA has decided to constitute the three-member expert committee, under the chairmanship of Mr A.C. Mukherjee.

The other members of the committee are K.N. Bhandari and Mr G.V. Rao.

While the terms of reference for the expert committee has five major issues, IRDA has requested the committee to furnish its recommendations by October 31 in respect of the first reference, where the committee has to make specific recommendations whether the five per cent discount presently enjoyed by certain segments of policyholders should continue or not and whether there was any need for special dispensation to be given for the clients of government, public sector undertakings and corporate clients.

The expert committee has been given time till December 31 to submit its recommendations on the remaining terms of reference to enable the regulator take appropriate decision to protect the interests of policyholders and for orderly development of insurance market, the communiqué said.

The expert committee has also been advised to consider other issues relevant for the market conduct and long-term development of the distribution channels by creating an efficient and viable intermediary channel-mix in the best interests of the future growth of the market, the insurers and the insuring public, the IRDA Chairman, Mr C.S. Rao, said.

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