IRDA New Guidelines For Life Insurance Agents (3)

In the interest of active Insurance Agents for any life insurance company I make following further suggestions in this regards:
1) As regards to recovery of commissions on the first years commissions paid the agents, in case of laps of insurance owner in 2nd year due to no payment of renewal premium will generate lot of problems for the insurance companies, because there is high percentage of agents quits after introducing 1 to 5 policies, they get paid their commissions immediately. Then it will be headache for the Insurance companies to recover the commission from such agents who have already quit their agency business. It will ultimately reflect on the performance of the company & regular premium paying 


customers shall be sufferer due to increase in expense ratio of the company. After all the companies shall pass on the expenses on the customers & they are not going to bear



 it from their own pocket.
2) Initial charges, in case of Unit Linked policies, are much ranging from 10% to 60% in the first years premium. & in later years, on renewal premiums it is in the range of 1% to 4%. Out of these charges the insurance agents are paid commissions in the range of 5% to 40%. The charges of different Insurance companies are not distinctive & they differ from company to company & product to product, it creates conflicts in the minds of customers.