Kathmandu. In order to develop professionalism among the insurance agents working for the life insurance company, the incentive of non-commercial agents has been started to be reduced.
The Insurance Rules, 2081 BS have a provision to use scissors in the facility of incentives in addition to the commission received by the insurance agent on the sale of insurance policies. Although this regulation was implemented in the month of March last year, the Nepal Insurance Authority agreed to implement it only in the current fiscal year after pressure from agents.
Rule 51 (3) of the regulation states that the insurer should determine the incentive facility on the basis of the renewal rate of the insurance agent. Due to this provision, the agent has been awarded the current fiscal year 2082. From this year, 83 people will be given incentive benefits only on the basis of their policy renewal rate. In the past, no matter how many insurance policies lapsed, they used to enjoy the full incentive benefits. However, with the implementation of the provisions of the regulations, this tradition will be broken. 
Schedule 10 of the Insurance Regulations provides that the incentive deduction should be made from the second year of working as an insurance agent. Under this provision, 40 percent of the renewal rate is less than 30 percent, 30 percent if the renewal rate is 30 percent, 45 to 60 percent is 20 percent and if the renewal rate is 60 to 75 percent, then the incentive deduction is 10 percent.
There are three types of agents in life insurance. An agent at the third level or the lowest level, an agent who has taken a new agent code at this level and has not created a new agent to be under the old one. Then there is the second layer. In which another agent network is active below that agent. And finally, the first level where the senior agent or agency manager who deploys two levels of agents (second and third level) under him is employed.
The third level agent can only enjoy commission and incentive facility on the first premium and renewal premium of the insurance policy sold directly. A second-level agent can receive 3 percent of the contribution made by a third-level agent to the business and a first-level agent who is above 1 percent as an incentive.
Now, by expanding the agent network at 3 levels, there is a big scissor in the amount of additional incentives for the old and senior agents who are enjoying additional incentive facilities.
KATHMANDU: The Insurance Authority of Nepal (BEE) has believed that the incentive provisions of the insurance regulations would be effective to curb the tendency of looking for new insurers in the greed of higher commission income but ignoring the old insured. Most of the agents do not give much importance to the old ones as they get more commission from the new insured than the old insured. However, in the long run, the agents who do this profession have been giving high priority to the after-sales service and are in constant contact with the old insured and provide as much service as possible at the doorstep.
