The Insurance Regulatory and Development Authority of India (Irdai) has proposed a solitary cutoff for the costs of general and medical coverage firms. This move is expected to relieve non-life insurers, especially private players.
According to the exposure draft released by the regulator, non-life insurers cannot spend a quantity exceeding 30 per cent of the gross premium written as company expense during a financial year.
Currently, insurance companies need to comply with business line-specific limits. And the regulator is seeking to discontinue the segmental compliance of company expenses and its reporting.
Company expenses would include all fees like operating costs. They may consist of commission, brokerage/remuneration, rewards to insurance agents, and insurance intermediaries. There can also be additional commission and expenses on reinsurance, which are charged to the earnings account.