India seeks greater commission transparency

India’s insurance agents may soon have to disclose to clients the amount of commission they earn from different products. The move is being considered by a high-level government committee. A panel comprising officials from the finance ministry, the central bank and regulators of insurance, provident funds and capital markets, is expected to announce its full proposals on enhancing transparency in insurance business by September 2009. Insurance companies offer up to 40% of premiums in commission to the agent, most of which is earned in the first year. The panel will also look at how to ensure agents continue to service customers throughout the life of a policy. Separately, the Insurance Regulatory and Development Authority (IRDA) has said it intends to scrap manual exams for candidates applying to be insurance agents in favour of an online system to reduce malpractice.