IRDAI Gave Instructions To Insurance Companies Reduce Expenses Benefit Policyholders

Insurance Policy Rules Update: The Insurance Regulatory and Development Authority...

Insurance Policy Rules Update: The Insurance Regulatory and Development Authority of India (IRDAI) has given instructions to the companies of General Insurance and Health Insurance. In this it has been said that companies should fix the limit of their expenses. Insurance regulator IRDAI in its notification has directed insurance companies to reduce the total expenses including turnover and commission on an annual basis.

here is the instructions
According to the draft of IRDAI, the board policy of all companies will have to take necessary steps to reduce the expenses in doing business on an annual basis and to reduce the expense of management of the company. Also, the benefit of reduction in expenses will have to be deducted in the premium to the policyholders.

Draft notification issued
Insurance regulator IRDAI has issued a draft notification to fix the limits of expenses of health insurance and general insurance companies. The total expenditure should not exceed 30% of the premium charged by the insurance companies. Expense of Management includes salary, fixed expenses and commission of policy sales. Let us tell you that in case of spending 10 percent more and the solvency is not up to the prescribed standard, the regulator can stop the performance allowance etc. to the officers of the top management of the company.

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