NBFCs seek 5 years to adapt to IRDAI commission caps
Non-Banking Financial Companies (NBFCs) are asking for five years to adjust to new limits on insurance commissions proposed by India's insurance regulator, IRDAI.
They also want permission to pay borrowers' premiums directly to insurers.
The pushback comes after IRDAI proposed capping commissions at 2% for credit life and 5% for credit health insurance, much lower than what NBFCs currently get.
FIDC warns 1.4 million PoSPs at risk
NBFCs say these lower commission caps don't cover their actual costs, which make up about 32% of each premium.
Their industry body, FIDC, suggested phasing down commissions gradually from nearly 50% to 25% over five years instead of cutting them overnight.
They warn that slashing rates too fast could put over 1.4 million Point-of-Sale Persons (PoSPs) relying on micro-commissions and make it harder for people in rural areas to access insurance.