Agents commission may be lowered

Mumbai: The Insurance Regulatory and Development Authority of India (IRDA) is thinking of lowering the commission paid on the first premium paid to life insurance agents.

We are talking to insurance agents associations on revising the commission paid on the first premium, IRDA chairman N Rangachary told reporters after addressing a seminar on pension funds reforms, organised by the Federation of Indian Chambers of Commerce and Industry.

Currently, the commission on the first premium is 40 per cent of the premium amount paid during the year. The commission on subsequent years are 5 per cent of the premium amount. The first year commission is high, which leads to agents not concentrating on servicing the policy in later years and instead focusing on new businesses, Rangachary said.