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General insurers may revise product premium rates without filing a product modification under the Product Filing Guidelines. This action responds to the new commission structure regulations. The change in premium rates must stay within plus or minus five percent of existing rates. No other parameters of the premium basis may change. Insurers must submit specific certificates and documents when they revise prices. The provisions take effect on 1st April 2017.
What you must do
Key dates
Who is affected
Thresholds
If you do not comply
Ask about this circular
भारतीय बीमा विनियामक और विकास प्राधिकरण INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY OF INDIA
Ref: IRDAI/NL/CIR/F&U/ 060 /03/2017
22nd March, 2017
The Chairman-cum-Managing Directors/ Chief Executive Officers of General Insurers
Re: Modification in premium rates due to revised Commission/Remuneration Structure and introduction of Reward System
The IRDAI (Payment of Commission or Remuneration or Reward to Insurance Agents and Insurance Intermediaries) Regulations 2016 comes into force with effect from 1st April, 2017. 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. 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 subject to the following:
I. The change in premium rates being limited to +/- 5% of the existing premium rates of products/add-ons.
II. There being no change in any other parameter of the premium basis. 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.
परिश्रम भवन, तीसरी तल, बशीरबाग, हैदराबाद-500 004. भारत (C) : 91-040-2338 1100, फैक्स : 91-040-6682 3334 ई-मेल: irda@irda.gov.in वेब: www.irda.gov.in 1 Parisharam Bhavan, 3rd Floor, Basheer Bagh, Hyderabad-500 004. India. Ph.: 91-040-2338 1100, Fax: 91-040-6682 3334 E-mail: irda@irda.gov.in Web.: www.irda.gov.in
Insurers shall ensure that the above norms are followed strictly and any violation noticed will be dealt with as deemed fit by the Authority, including withdrawal of the product/add-on.
The provisions of the circular shall be effective from 1st April, 2017.
(P. J. Joseph) Member (Non-life)
2
Annexure
Certificate
This is to certify that:
(name of product) with UIN (mention UIN) was withdrawn from the market on (mention date of withdrawal).
The above product was modified with UIN (mention UIN) on account of implementation of IRDAI (Payment of commission or remuneration or reward to Insurance Agents and Intermediaries) Regulations 2016 as per IRDAI Circular under Ref: ---------------------------.
The modified product (name of product) with UIN (mention UIN) was launched in the market on (mention date of launch).
The change in premium rates after modification are limited to +/- 5% of the premium rates already approved product/add-on.
There is no change in any other parameter in the premium basis except commission or reward or sales related expenses.
There is no detrimental change in premium rates or any other provision in respect of policies already sold under existing versions of the product / add-on.
The premium rates, advantages, terms and conditions of the modified product/add-on (Name of the product/add-on) after the modification are workable and sound, the assumptions are reasonable and the product / add-on is financially viable.
The premiums offered are fair and equitable taking into account the modification between policies sold by different distribution channels.
The modified product/add-on comply with all the extant norms and Regulations of the Authority.
Name and Signature of Appointed Actuary Date Place
Name and Signature of Chief Executive Officer with seal of the Insurer Date Place
