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IRDA extends deadline for implementation of new norms to December 2013

A new ‘individual category’ sector norm which was supposed to be implemented from 1st October 2013 has received the extension of deadline from market regulator

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Last Updated - May 16, 2023
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A new ‘individual category’ sector norm which was supposed to be implemented from 1st October 2013 has received the extension of deadline from market regulator Insurance Regulatory and Development Authority. This deadline has been extended to 31st December 2013. The new model states that all existing products have to be withdrawn from the market from 01st October 2013 and that the decision to extend the deadline was taken due to the fact that insurance companies should not be left with any products available for sale. 

IRDA has revised the deadline for the 2nd time in the span of 3 months. Earlier the extension was done in June 2013. 

Under the new set of norms, commission payable will be linked to premium paying term of the product. Further, the maximum commission that can be paid to an agent is 15% for the 1st year of premium, 7.5% for 2nd year and 5% for the 3rd year. In current scenario an agent gets commission of 35% irrespective of the premium paying terms. 

Though the premium amount under this new model will rise by 1 – 2%, the benefits available under this new rule will exceed far. The customers will be benefited with benefits like guaranteed surrender value, higher cover in case of a death etc. for eg. under new rule for customers under 45 years of age, death cover will be higher; it will be 10 times the annual premium or 105% of all the premiums paid. Other eg is that if a person fails to pay premium after 5 terms, he will get a guaranteed surrender value of 30%, which at present, is not available in the traditional plan.

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