Liberalisation of Expenses of Management Limits and Linkage with Commission: Impact on the Insurance Industry

Introduction

Pursuant to Sections 40B and 40C of the Insurance Act, 1938 (“Insurance Act”), the Insurance Regulatory and Development Authority of India (“IRDAI”) is empowered to regulate and impose limits on the amount that insurance companies may spend on Expenses of Management[1] (“EoM”). Further, in terms of Section 40 of the Insurance Act, no insurer is permitted to pay, or agree to do so, to any insurance agent or intermediary, commission or remuneration in any form other than in the manner specified by the IRDAI through a regulation.Continue Reading Liberalisation of Expenses of Management Limits and Linkage with Commission: Impact on the Insurance Industry