IRDAI Insurance Rules may bring several changes for customers as the insurance regulator has proposed new measures for insurance companies and distributors.
The proposals cover company expenses, commissions, website practices and access to policy information.
The aim is to control sales and operational expenses while making important insurance information easier for customers to access.
IRDAI Insurance Rules on Company Expenses
IRDAI has proposed reducing the Expenses of Management (EoM) for insurance companies. Life insurers may have to bring EoM down to 15% of premiums within two years and 12.5% within five years.
For general insurance companies, the proposed limits are 25% within two years and 20% within five years.
The changes could require insurers to control operational and distribution costs, including commissions and other sales-related expenses.
Commission Limits May Change
IRDAI has also proposed limits on commissions for different insurance products. In health insurance, commissions on new policies and renewals may be reduced for some distribution channels.
Under the proposal, commission could be limited to 15% for new policies and 5% for renewals in certain channels.
The proposal also includes commission limits for term insurance and motor third-party insurance. For used vehicles, motor third-party insurance commission is proposed to be capped at 2.5%.
Insurance Websites May Need Less Personal Data
A major proposed change could affect how insurance websites collect customer information. According to a Moneycontrol report, customers may be able to check policy premiums and features without first entering their name, mobile number or email address.
This means people could view prices, policy features, performance and other important details without sharing personal information simply to access basic information.
IRDAI has proposed that customer details should not be collected only for informational purposes and then used for sales activities.
Dark Patterns May Be Blocked
IRDAI has identified practices that require customers to submit their mobile number or email address before accessing basic policy information as a dark pattern.
The proposal seeks to prevent such practices and may require insurers to present product information in a simple and prescribed format.
Customers could also get easier access to FAQs, premiums, key policy terms and other important details.
Claim and Complaint Details Made Easier
The proposal also covers information about claim settlement records and complaint handling. IRDAI wants such information to be presented in an easy-to-understand and comparable format.
This could help customers compare information about different insurers and policies before making an insurance-related decision.
However, these changes are currently only at the proposal stage. The final impact will become clear after IRDAI issues the applicable rules and confirms which provisions will be implemented.
