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Exclusive: Insurers seek more time to absorb EoM cuts, due process for mis-selling flags as IRDAI weighs 650-plus comments

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Exclusive: Insurers seek more time to absorb EoM cuts, due process for mis-selling flags as IRDAI weighs 650-plus comments

Exclusive: Insurers seek more time to absorb EoM cuts, due process for mis-selling flags as IRDAI weighs 650-plus comments

Industry feedback is understood to have sought a more gradual transition to tighter expense limits, citing rising compliance and technology costs, while also pressing for an adjudication process before alleged mis-selling is recorded against distributors.

With more than 650 comments received on its proposed insurance distribution overhaul , the Insurance Regulatory and Development Authority of India ( IRDAI ) is weighing competing industry concerns over commission caps, expense-of-management ( EoM ) limits and accountability for mis-selling . The regulator has extended the deadline for feedback to October 31 from October 25, after releasing its two-part consultation paper, Recalibrating Economics of Insurance Distribution, on September 23. A senior life insurance executive familiar with the industry’s feedback said the broad direction of the reforms was not the primary point of contention among insurers, but the speed at which the proposed changes would be implemented. The industry has sought a more workable transition to tighter EoM limits, arguing that a significant portion of insurers could find it difficult to meet the proposed levels immediately, even with further cost-cutting. Advt

The executive said insurers were also dealing with a series of one-time and recurring investments linked to regulatory and technology requirements, including Ind AS, data protection, cybersecurity and the proposed risk-based capital framework. These costs could weigh on expense ratios in the near term, making the pace of convergence a key issue in the industry’s feedback to the regulator.


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