Public Sector Insurers Brought Down Agent Commissions For Health Policies Above 55

The public sector insurance companies have brought down agent commissions by more than a third to 5% for health policies sold to those above age 55. This new commission structure will be effective from this month.

Under the new guidelines, the public sector insurance companies should pay 15% commission for the health policies sold to those above age 35. For those in 35-55 age group, the health policies will attract a commission of 10% while for those above age 55, the agent commission has been capped at 5%. This decision is aimed at curbing loses of public sector insurers such as – National Insurance, New India Insurance, Oriental Insurance and United India Insurance.

Now, individuals above 55 will find hard to get health cover from public sector insurance companies as agents will not be able to provide service to policyholders and this may result in lapsation of health insurance policies. The directive on commissions strikes a big blow to distribution of policies.

According to the General Insurance Agent’s Association, insurance business have seen a slow-down after after commissions came down. The association has called for a meeting on September 5 to protest against the new directive. Agents of public sector insurers say that in any case the move may be deferred.

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